What is the journal entry to record depreciation expense?

• A. Debit Depreciation Expense; Credit Accumulated Depreciation.
• B. Debit Depreciation Expense; Credit Depreciation Payable.
• C. Debit Accumulated Depreciation; Credit Depreciation Expense.
• D. Debit Plant and Equipment; Credit Accumulated Depreciation.

Answer: (A)

Depreciation represents allocating part of an asset’s cost as an operating expense for the period, while also reducing the asset’s carrying value on the balance sheet. The journal entry to record this is a debit to Depreciation Expense because you’re recognizing an expense, and a credit to Accumulated Depreciation because this contra-asset account accumulates total depreciation over time and lowers the asset’s book value. This setup follows the matching principle, tying the expense to the period in which the asset is used.

Options that credit a depreciation-related liability aren’t appropriate, since there is no separate payable for depreciation. Reversing the normal directions—debiting the contra-asset or crediting the expense—would misstate both the income statement and the balance sheet. Debiting the asset itself would incorrectly increase its value.