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We already studied about Depreciation Definition in our previous article, but here we will record the Accounting Journal Entry For Depreciation in book of Entrepreneur. When Fixed Assets / Non Current Assets  are purchased by the business for Cash or on Credit Basis, then Assets need to be depreciated in order to find its usefulness in the business. So, depreciation method is decided and depreciation is charged on assets per annum within the useful life of assets. For Example, An Office Equipment bought by the business for Rs. 82000, residual value is Rs. 2000, useful life is 5 years, then by applying straight line depreciation method, we get the following Depreciation Expense in the current year as shown below: Depreciation Expense - Equipment a/c 16000                                                         Ac...

Depreciation Definition And Meaning What is Depreciation? Depreciation is the Systematic allocation of the cost of the Fixed Assets / Non Current Assets over its useful life. With the passage of time, the market value of Fixed Assets / Non Current Assets may increase or decrease, but for proper allocation of the assets, deprecation is calculated by applying different Depreciation Methods in order to estimate the usefulness of the assets within the estimated useful life. Note: The term "Depreciatio n" is used when allocate cost of an Tangible  No n Current Asset  while the word " Amortization " is used when we allocate cost of an Intangible  No n Current Asset . . Explanation 1. It is to be noted that valuation of assets is different than allocation of the cost of the assets in the sense that valuation is the process of finding the market value of the asset for selling in the marketplace while allocation of the cost of the ...