How is depreciation expense recorded in relation to accumulated depreciation?

• A. Debit Accumulated Depreciation and Credit Depreciation Expense
• B. Debit Depreciation Expense and Credit Accumulated Depreciation
• C. Debit Depreciation Expense and Credit Accumulated Depreciation
• D. Credit Depreciation Expense and Debit Accumulated Depreciation

Answer: (C)

When recording depreciation, you recognize the cost of using the asset in the current period and also accumulate that cost against the asset for future periods. Depreciation Expense is an expense account, so it increases with a debit. Accumulated Depreciation is a contra-asset account, which carries a credit balance and increases with a credit. Therefore, the correct entry is to debit Depreciation Expense to reflect the period’s expense and credit Accumulated Depreciation to accumulate the total depreciation against the asset. This reduces the asset’s net book value (Cost minus Accumulated Depreciation) and increases the period’s expenses, matching the asset’s use with the revenue it helps generate. The other options would either move balances in the opposite directions or misstate which account should be increased.