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Question

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

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

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

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