Question

Depreciation charged at the end of the year is to be recorded where

Answer 1

Two methods of recording depreciation in the books of accounts :

1. When a provision for depreciation account is not maintained :

Under this method, the amount of depreciation is charged to the Depreciation Account and credit to the asset account. The asset account appears in the Balance sheet at the written down value(i.e., the value remaining after deducting depreciation). The depreciation account , being nominal account is transferred to the Profit and Loss A/C

2.When a provision for depreciation account is maintained :

Under this method, the amount of depreciation to be provided in a particular year is debited to the profit and loss A/C and the corresponding credit being given to Provision for depreciation Account .

The asset account appears in the books at its original value and the Provision for depreciation appears on the liablities side.

Answer 2

We know that depreciation charged for only the assets like furniture machine etc.

It will recorded in books of machine or assets a/c in credit side .