Question

Depreciation on machinery what will be the journal entry for that

Answer 1

At the time of charging deprecation:

Depreciation A/C   Dr   Rs  xxx

     To Machinery A/C   Rs.xxx

(being depreciation charged on machinery)

At the time of transfer to Profit and Loss A/C:

Profit and Loss A/C   Dr   Rs.xxx

  To Depreciaton on Machinery A/C  Rs.xxx

(being depreciation on machinery charged to P&L)

Answer 2

Answer:

Depreciation A/c                                         D.r.

                    To Machinery A/c

(Being depreciation charged on machinery)

Explanation:

When charging deprecation on machinery:-

Depreciation A/C                                          D.r.  

               To Machinery A/C  

(Being depreciation charged on machinery)

When transferring it to Profit and Loss A/C:

Profit and Loss A/C                                           D.r.  

 To Depreciation on Machinery A/C  

(Being depreciation on machinery charged to P&L)

Depreciation is a measure of the wearing and tearing out, consumption or loss of value of a depreciable asset arising from use, passing of time or obsolescence through technology and market changes. Depreciation is allocated to change a fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets.

There are two methods to charge depreciation on any machine:-

(i) Straight line method

(ii) Diminishing balance method

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