The accounting entry for depreciation at the end of each year is to debit

Assessment: WAEC SSCE - Financial Accounting - 2000 (Objective) Subject: Financial Accounting

Question 1 Report

The accounting entry for depreciation at the end of each year is to debit
Answer Details
The accounting entry for depreciation at the end of each year is to debit the provision for depreciation account and credit the machinery account. This is because depreciation is the systematic allocation of the cost of a fixed asset over its useful life, which reduces the carrying amount of the asset. The provision for depreciation account is used to accumulate the total amount of depreciation charged to an asset over its useful life. By debiting the provision for depreciation account, we are increasing the amount of accumulated depreciation, which reflects the total depreciation charged to date. By crediting the machinery account, we are reducing the carrying amount of the asset on the balance sheet, which reflects the fact that the asset has been used up over time.
Read lesson note on Provisions And Reserves (WAEC)
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