Question

In the trial balance the balance of the Provision for Depreciation Account is _______.

• A. Shown as a credit item
• B. Shown as a debit item
• C. Sometimes shown as a credit, sometimes as a debit
• D. Not shown, as it is part of depreciation

Answer 1

The correct option is A Shown as a credit item

All the liabilities and provisions account are always having a credit balance. When the depreciation is provided in the books by creating a depreciation provision account, following entry will be passed:

Depreciation A/c Dr.

To Provision for Depreciation A/c

Provision for depreciation will be shown as credit item in the trial balance.