the entry to record depreciation expense entries causes an immediate decrease in assets and in net income.
The basic journal entry for depreciation is to debit the Depreciation Expense account (which shows in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the number of fixed assets).
Depreciation expense is the cost of an item that has been depreciated for a specific time or period, and it shows how much of the asset's value was used up in that year. Accumulated depreciation is the entire amount of depreciation costs that have been attributed to an asset since it was first used.
To account for a decline in value caused by something's age or level of use, a certain sum is deducted from gross profit as a fee for depreciation. If your organization purchases and owns the equipment, it may be possible to deduct a depreciation expense.
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