Which account is typically debited to recognize depreciation expense in an adjusting entry?

• A. Accumulated Depreciation
• B. Cash
• C. Depreciation Expense
• D. Equipment

Answer: (C)

Depreciation is the process of allocating an asset’s cost over its useful life as an expense. In the adjusting entry, you debit the Depreciation Expense account to reflect this period’s cost, and you credit Accumulated Depreciation, a contra-asset that reduces the asset’s book value. Cash isn’t involved because depreciation is non-cash. Equipment isn’t debited because depreciation doesn’t increase the asset’s cost on the books; instead, the asset’s accumulated reduction is tracked through Accumulated Depreciation. This entry increases expenses on the income statement and increases the accumulated depreciation balance on the balance sheet, lowering the net book value of the asset.