Whai is depreciation and journal entry

Question

Accepted Answer

Depreciation is the allocation of the cost of an asset over its useful life. Journal entry records the financial transaction related to depreciation.

Depreciation is a non-cash expense that reduces the value of an asset over time.
It is recorded in the income statement as an expense and in the balance sheet as an accumulated depreciation.
The journal entry for depreciation involves debiting the depreciation expense account and crediting the accumulated depreciation account.
For example, if a company has a vehicle with a useful life of 5 years and a cost of $20,000, it may depreciate the vehicle by $4,000 per year. The journal entry would be: Debit Depreciation Expense $4,000 and Credit Accumulated Depreciation $4,000.

Accepted Answer

Non cash expense. Reduction in value of asset over the useful life

Deprication

To machinery

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