Question

Give journal entries:
For deducting depreciation amount from the cost of the asset.

• A. Depreciation A/c Dr.
  To Asset A/c
• B. Profit & Loss A/c Dr.
  To Depreciation A/cP
• C. Asset A/c Dr.
  To Depreciation A/c
• D. DepreciationA/c Dr.
  To Profit & Loss A/c

Answer 1

The correct option is A Depreciation A/c Dr.

To Asset A/c
Depreciation is the permanent and continuous decrease in the book value of a depreciable fixed asset due to use, effluxion of time, obsolescence, expiration of legal rights or any other cause.

Depreciation is a non cash expense. As per the golden rules of accounting, all expenses are related to nominal A/c and assets are related to Real A/c.

Therefore, journal entry for deducting depreciation amount from the cost of the asset is :

Depreciation A/c Dr.

To Asset A/c