Answer
Depreciation is the process of allocating to expense the cost of plant asset over its useful life; similarly amortization is the process of allocating to expense the cost of intangibles.
Work Step by Step
However, the difference between the two is, to record amortization of an intangible asset, a company increases amortization expense, and decreases (credits) the specific intangible asset. Unlike Depreciation, no contra account, like accumulated depreciation expense is prepared.
