PRC-1 · Chapter 8 · Question 70 of 100
A company purchased a machine for Rs. 100,000 with a 10-year life. A junior accountant completely omitted recording the annual depreciation for the first year. How should this error be corrected?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Depreciation Expense Rs. 10,000, Credit Accumulated Depreciation Rs. 10,000
Explanation
To correct the omission of depreciation, the expense must be recorded by debiting Depreciation Expense and crediting Accumulated Depreciation for 10,000 (100,000 / 10).
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