Multiple choice

Depreciation charged on machinery is Rs. 40,000. The correct entry is

  1. Machinery A/c Dr 40,000
    To Depreciation A/c 40,000
  2. Depreciation A/c Dr 40,000
    To Machinery A/c 40,000
  3. Cash A/c Dr 40,000
    To Machinery A/c 40,000

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Depreciation is a loss and so it would be debited. Machinery is credited, since it is a decrease in asset, and it is considered that it goes out from business.

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