What is the impact of depreciation on the trial balance?

What is the impact of depreciation on the trial balance?

Step 1: Understand what depreciation is. It is the process of allocating the cost of a physical asset over its useful life.
Step 2: Recognize that assets are recorded on the trial balance. These include things like buildings, machinery, and vehicles.
Step 3: Know that as depreciation is recorded, it reduces the value of these assets on the trial balance.
Step 4: Realize that this reduction in asset value is important for accurately reflecting the company's financial position.
Step 5: Remember that depreciation also affects the income statement, as it is an expense that reduces profit.

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