The journal entry to record depreciation on factory equipment is to:

• A. Debit Factory Equipment; Credit Depreciation Expense
• B. Debit Depreciation Expense; Credit Accumulated Depreciation
• C. Debit Depreciation Expense; Credit Factory Equipment
• D. Debit Accumulated Depreciation; Credit Depreciation Expense

Answer: (B)

Verified step by step guidance

1. Understand the concept of depreciation: Depreciation is the allocation of the cost of a tangible asset over its useful life. It reflects the wear and tear or obsolescence of the asset over time.
2. Identify the correct accounts involved: Depreciation Expense is an expense account that records the periodic depreciation cost, and Accumulated Depreciation is a contra-asset account that accumulates the total depreciation recorded for an asset.
3. Determine the correct journal entry: Depreciation Expense is debited to increase the expense, and Accumulated Depreciation is credited to increase the contra-asset account, reducing the book value of the asset.
4. Understand why other options are incorrect: For example, debiting Factory Equipment directly would incorrectly increase the asset's value, which is not the purpose of recording depreciation.
5. Apply the correct journal entry format: The journal entry should be written as follows: Debit Depreciation Expense; Credit Accumulated Depreciation. This reflects the periodic depreciation cost and the reduction in the asset's book value.