At the end of each season a music festival transfers the year's depreciation on its staging to a separate account, so that the cost of the staging is left u...

Keeping depreciation in a separate accumulated depreciation account preserves the cost of the staging untouched in the non-current asset account, so the statement of financial position can show cost, accumulated depreciation and carrying amount separately.

The double entry for the year's charge is to debit the depreciation expense account, which is then transferred to the income statement, and to credit the accumulated depreciation account. The entry made in the accumulated depreciation account is therefore a credit entry. The account builds up a growing credit balance year by year, and that balance is deducted from cost when the carrying amount is presented.

A debit entry would reduce the accumulated depreciation, which is the entry used only when an asset is disposed of and its accumulated depreciation is transferred out to the disposal account. Recording both a debit and a credit of the same amount in the one account would leave it unchanged and defeat the purpose of the account. Saying no entry is made confuses the income statement charge with the ledger record: the charge does go to the income statement, but only as one half of a double entry, and the other half must be recorded somewhere.

Exam reminder: accumulated depreciation is not an expense and not a liability. It is a credit balance set against the cost of the asset it relates to.