Question

Depreciation is appearing in the trial balance of a company. While making final accounts, it should shown in __________________.

• A. The profit and loss account.
• B. The balance sheet as a deduction from the asset concerned.
• C. The profit and loss account and balance sheet.
• D. The profit and loss account of balance sheet.

Answer 1

The correct option is A The profit and loss account.

Depreciation is charge on each of the asset on a certain percentage. Depreciation is a charge to profit and loss account and should be debited to profit & loss account by crediting the respective assets.

Following accounting entry is required to pass in books of account:

Depreciation A/c Dr.

To Assets A/c

(Being Depreciation provided)

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Profit & Loss A/c Dr.

To Depreciation A/c

(Being depreciation transferred to profit & loss a/c )

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