[jamesmackennon]

...but sometimes things aren't inflows or outflows. Depreciation is neither, yet it's (almost) fundamental to accounting.

[mumblemumble]

Depreciation is also neither a credit nor a debit.

Doesn't one normally handle depreciation by creating an expense account called "depreciation", and recording the depreciation as a debit in the asset account and a credit in the depreciation account?

And couldn't one just as easily word that as, "We track the depreciation by creating an account for it, and recording a flow of money into it from the asset's account?"

[bokstavkjeks]

You often end up with three accounts. Asset (balance sheet), accumulated depreciation (balance sheet), and the depreciation expense account (P&L).

In which case the depreciation is cr. acc. depreciation and dr. depreciation expense.

[feanaro]

Yes, but the other way around: you debit the "Depreciation" expense account (since it is the sink, it increases) and credit the asset account (it is the source, it decreases).

[mumblemumble]

I rest my case.