Question 2

C.

The most essential distinction between depreciation and the accumulated depreciation lies in the way that one shows up as a cost on the income statement, and the other is a contra resource gave an account of the balance sheet. Both relate to the “wearing out” of hardware, apparatus, or another advantage, and help to express a genuine incentive for the benefit (Hsiang & Jina, 2019).

The journal entry passed for the recording of the depreciation while presence of Accumulated depreciation is determined below.

Depreciation A/c

  To accumulated depreciation A/c

Accumulated Depreciation

  To Fixed Assets

D.

Accrual and Deferral are a piece of those kinds of accounting modification passages where there is a period slack in the announcing and acknowledgment of pay and cost. The major difference is accrual happens before an installment or a receipt and deferral happen after an installment or a receipt.

There are several examples of accrual such as interest expense and income, or when a firm delivers a good or service even after the cash is not yet paid. On the other hand, the best example of deferred is insurance, rent, supplies and equipment purchased (Fedyk, Singer & Sougiannis, 2019).

References

Hsiang, S. M., & Jina, A. S. (2019). Replication data for: Geography, Depreciation, and Growth.

Fedyk, T., Singer, Z., & Sougiannis, T. (2019). The accrual anomaly: Accrual originations, accrual reversals, and resolution of uncertainty. Contemporary Accounting Research.