If A Company Fails To Record Depreciation Expense
I f a compa ny or b usi ness fails to record Depreciation Expense Account , t h en N et Income in Income Statem ent is overstated as no depreciation expense is recorded in Income Statement or Profit And Loss Account . If complete journal entry of depreciation expense is omitted or not recorded, t he n it also affects assets side on b ala nce s heet. As, depreciation for the period is not added to the Accumulated Depreciation so the total fixed assets on balance sheet are overstated as less accumulated depreciation is deducted from relevant fixed asset / non current asset on balance sheet. The adjusti ng entry to record depreciation expense is s how n b elow: Depreciatio n Expense a/c XXX ...