Question

Which of this A/c appearing in trial balance is NOT transferred to income statement?

• A. Salary A/c
• B. Purchase A/c
• C. Accumulated Depreciation A/c
• D. Bad Debts A/c

Answer 1

The correct option is C Accumulated Depreciation A/c

There are two ways to record the depreciation in the books of account.

1) Depreciation a/c is debited and the respective asset a/c will be credited. In such case, depreciation is recorded in the profit & loss a/c and assets are shown in the balance sheet on the net value i.e. gross value- depreciation.

2) In the second method, assets are always kept in the books on their original value. Depreciation is routed through accumulated depreciation a/c. In such case, assets are shown in the balance sheet as Gross assets minus accumulated depreciation.

Accumulated depreciation a/c is not to be transferred to income statement and to be shown in the balance sheet.