Depreciation Account appearing in the Trial Balance is shown in:
Correct answer: C. Profit and Loss A/c
- A. Deducted from the concerned assets A/c
- B. Trading A/c
- C. Profit and Loss A/c
- D. Shown on the liability side
Explanation
A depreciation account with a debit balance represents an expense for the accounting period, so it is charged to the Profit and Loss Account. The asset is reduced directly only when accumulated depreciation is maintained in a separate account.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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