Q.Furniture stands at ₹60,000 in the Trial Balance. Depreciation is to be charged at 10% per annum. In the final accounts, this is shown as:
(A) ₹6,000 debited to P&L Account only, Furniture unchanged in the Balance Sheet
(B) ₹6,000 debited to P&L Account, and Furniture shown at ₹54,000 in the Balance Sheet
(C) ₹6,000 added to Furniture in the Balance Sheet only
(D) ₹60,000 fully written off in the current year

Depreciation's double effect is a P&L expense AND a matching reduction of the same asset in the Balance Sheet, never just one side alone.

Depreciation = ₹60,000 × 10% = ₹6,000. This ₹6,000 must be debited to the Profit and Loss Account as an expense, AND deducted from Furniture's value in the Balance Sheet, showing it at ₹60,000 − ₹6,000 = ₹54,000.

Option-by-option analysis:

• (A) Incorrect — the Balance Sheet MUST also reflect the reduced asset value; showing it unchanged is incomplete.
• (B) Correct — both halves of the double effect are captured. …