Question

multiple choice question
choose the statement below that demonstrates the correct adjusting entry to recognize depreciation expense on a building.
debit building; credit accumulated depreciation.
debit accumulated depreciation; credit depreciation expense.
debit depreciation expense; credit building.
debit depreciation expense; credit accumulated depreciation.

Explanation:

Step1: Identify expense account

Depreciation is an operating expense, so we debit the expense account to recognize it:
Debit: Depreciation Expense

Step2: Identify contra-asset account

We use a contra-asset account (Accumulated Depreciation) to reduce the building's book value without crediting the asset directly:
Credit: Accumulated Depreciation

Step3: Match to correct option

The entry aligns with the option: Debit Depreciation expense; credit Accumulated depreciation.

Answer:

Debit Depreciation expense; credit Accumulated depreciation.