Depreciation

Question 1

The process of allocating the cost of a long-term asset (like machinery or vehicles) over its useful life.

Answer 1

Depreciation

Question 2

You bought a machine for $12,000 that has a useful life of 5 years. At the end of each year, you record depreciation of $2,400 ($12,000 ÷ 5 years).

Answer 2

Debit: Depreciation Expense $2,400
Credit: Accumulated Depreciation $2,400