Depreciation of the business is recorded in which of the following financial statement
Question
Depreciation of the business is recorded in which of the following financial statement
Solution
Depreciation of a business is recorded in the Income Statement and the Balance Sheet.
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Income Statement: Depreciation is an expense, and like all other expenses, it is deducted from the revenue when calculating the net income of the business in the income statement.
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Balance Sheet: Depreciation is also recorded in the balance sheet. It is subtracted from the total value of the business's assets. Over time, as assets are used, they depreciate, or lose value. This decrease in value is recorded as depreciation in the balance sheet.
So, the correct answer is that depreciation is recorded in both the Income Statement and the Balance Sheet.
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