Answer:
It reduce the owner equity and asset account balance
Explanation:
Depreciation: The depreciation is an expense that shows a reduction in the value of the fixed assets due to tear and wear, obsolesce, usage, time period, etc. It is shown on the debit side of the income statement. It is a non-cash item that does not affect the cash balance.
The accumulated depreciation is the depreciation which is till date. It is a contra account and reduce the asset balance.
The journal entry is shown below:
Depreciation Expense A/c Dr XXXXX
To Accumulated Depreciation A/c XXXXX
(Being depreciation expense is recorded)
