Journal Entry for Depreciation

Before looking into journal entry for depreciation one must know about depreciation, deprecation is an expense for a company but it is a non cash expense as company does not have to pay anything for it but company have to make provision for depreciation because assets have to be replaced in few years. Given below is the journal entry for depreciation –

Depreciation Account  Dr

To Accumulated Deprecation

In the above journal entry depreciation is debited because the profit of a company reduces due to depreciation and accumulated depreciation is a contra account and it is shown in asset side of the balance sheet by way of deduction from the value of fixed assets so as to arrive at net figure of fixed assets.