Multiple choice

When Provision for Depreciation Account is maintained, the annual charge for depreciation shall be ____________.

  1. debited to Provision for Depreciation Account and credited to profit and loss acount

  2. debited to Asset Account and credited to profit and loss appropriation account

  3. credited to profit and loss account and debited to asset account

  4. debited to Profit and loss Account and credited to Provision for Depreciation Account

  5. debited to profit and loss account and credited to asset account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

To record annual charges of depriciation profit and loss account will be debited and provision for depreciation account will be credit because we are maintaining it and is just like liability of business. Like other liabilities, this liability account will be credit.

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