Question

__________ is accumulated in a separate account instead of being adjusted in asset account under provision method.

• A. Cost
• B. Depreciation
• C. Expenses
• D. None

Answer 1

Answer: (B)

Depreciation

When the depreciation is charged by creating accumulated depreciation account, following journal entry is passed:

Depreciation A/c Dr.

To Accumulated Depreciation A/c

Under accumulated depreciation method, a separate account is created for accumulation of depreciation instead of being adjusted in asset a/c.