Accounting questions?

Question

Ok, i was little bit confused about when u write off equipment
For example:
lets say i bought a machine, for 100$, i would ,debit equipment and credit cash, then after some time the machine got depreciated with no salvage value, so at this point i would write, Accumilated dep. debit this 100 and credit equipment for 100, but how does the expenss register????? i though acum dep. is a contra asset account, not and expense account, or is it?

Answer 1

Accumulated depreciation is a contra asset account.

When you record depreciation, you debit expense and credit accumulated depreciation. The equipment account is not affected.

Answer 2

you wouldn't credit equipment for $100.

you would credit accumulated depreciation for 100 and debit depreciation expense for 100.


accum-depr-machines/equipment is the contra asset account, so it will never be more than the equipment account. they would both just grow be considered to offset each other. and you get to expense the expense portion annually, while keeping track of what you have left.

Answer 3

Dr. Asset
Cr. Cash

While charging the depreciation
Dr. P/l
Cr. Acc. Depr

While scrapping the asset
Dr. Acc. Depr
Cr. Asset

http://futureaccountant.com/

Answer 4

Debit: Cash 10,000 Credit: Equipment 8,000 Credit: Gain on sale of equipment 2,000 THe gain on sale of equipment will be reported as "other income" in the income statement. net income in the income statement will then be carried over to the retained earnings account.