1. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset Account The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the Asset a/c & Credit the Bank a/c STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side

2. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset a/c The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the asset account & Credit the bank account STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side

3. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset a/c The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the Asset a/c & Credit the Bank a/c STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side

4. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset a/c The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the Asset a/c & Credit the Bank a/c STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side

5. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset Account The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the Asset a/c & Credit the Bank a/c STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side

6. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset Account The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the Asset a/c & Credit the Bank a/c STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side

7. Accounting for Depreciation – THE STEPS STEP 6 – Balance the Accumulated Depreciation Account The closing balance should be on the debit side STEP 5 – Account for Annual Depreciation Debit the Depreciation P&L a/c & Credit Accumulated Depreciation a/c STEP 4 – Balance the Asset Account The closing balance will be on the credit side STEP 3 – Account for Assets Disposed 1) Cost: Debit Disposal a/c & Credit Asset a/c 2) Depreciation: Debit Accumulated Depreciation a/c & Credit Disposal a/c 3) Proceeds: Debit Bank a/c & Credit Disposal a/c 4) Profit or Loss transferred to P&L a/c STEP 2 – Account for Assets Purchased Debit the Asset a/c & Credit the Bank a/c STEP 1 – Enter Opening Balances The asset a/c opening balance goes on the debit sideThe accumulated depreciation a/c opening balance goes on the credit side