Which approach is used to keep depreciation in QuickBooks Online up to date, if a depreciation workflow is available?

• A. Use a Fixed Asset account for the asset; record depreciation via a journal entry or use an asset depreciation workflow if available.
• B. Ignore depreciation and rely on other asset tracking.
• C. Record depreciation as a separate cash outflow.
• D. Track depreciation in a separate accounting system.

Answer: (A)

Depreciation in QuickBooks Online should be kept up to date by recording it against the asset’s Fixed Asset account, using the asset depreciation workflow if one is available, or posting a journal entry to reflect depreciation. This approach updates the asset’s net book value (cost minus accumulated depreciation) and recognizes depreciation expense in the income statement without affecting cash. If the automatic workflow isn’t available, a journal entry that debits depreciation expense and credits accumulated depreciation achieves the same result, keeping financial reports accurate. Other methods, like ignoring depreciation, treating it as a cash outflow, or tracking it in a separate system, would misstate both the asset value and the expenses.