What is the standard journal entry to record depreciation expense?

• A. Debit Depreciation Expense; Credit Accumulated Depreciation.
• B. Debit Accumulated Depreciation; Credit Depreciation Expense.
• C. Debit PPE; Credit Cash.
• D. Debit Cash; Credit Revenue.

Answer: (A)

Depreciation is recorded by recognizing an expense and reducing the asset’s carrying value through a contra-asset account. When you record depreciation, you debit Depreciation Expense (an income statement item that lowers net income) and credit Accumulated Depreciation (the cumulative contra-asset that reduces the book value of the asset on the balance sheet). This mirrors the idea that the asset is being used up over time, so its cost is allocated as an expense while the asset’s net value decreases. The entry keeps cash untouched, since depreciation is non-cash.

So, the standard entry is to debit Depreciation Expense and credit Accumulated Depreciation for the depreciation amount. Debiting accumulated depreciation and crediting depreciation expense would reverse the effect. Debiting PPE and crediting Cash would be used for purchasing the asset, not recording depreciation. Debiting Cash and crediting Revenue relates to cash receipts and revenue, not depreciation.