**Journal Entry for Charging Depreciation on Fixtures**

When a business owns fixed assets such as fixtures, it is necessary to account for their gradual wear and tear over time. This is done through the process of depreciation, which allocates a portion of the asset's cost as an expense over its useful life. In this case, we will prepare a journal entry to charge depreciation on fixtures worth Rs. 40,000 at a rate of 10% for a period of 3 months.

**1. Understand the Concept of Depreciation:**
Depreciation is a non-cash expense that reflects the reduction in value of a fixed asset over time due to factors like age, usage, and obsolescence. It accounts for the wear and tear or the consumption of the asset's value during its useful life. By charging depreciation, a business recognizes the cost of using the asset and distributes it over the accounting periods in which the asset generates revenue.

**2. Determine the Depreciation Expense:**
To calculate the depreciation expense, we multiply the cost of the asset by the depreciation rate and divide it by the number of accounting periods in a year. In this case, the cost of the fixtures is Rs. 40,000, and the depreciation rate is 10%. As the period is for 3 months, we need to adjust the depreciation accordingly.

Depreciation for 3 months = (Cost of Fixtures * Depreciation Rate * Time) / Total Number of Months in a Year
Depreciation for 3 months = (Rs. 40,000 * 10% * 3) / 12 = Rs. 1,000

**3. Prepare the Journal Entry:**
The journal entry for charging depreciation on fixtures would involve debiting the Depreciation Expense account and crediting the Accumulated Depreciation account. Accumulated Depreciation is a contra-asset account that offsets the value of the asset on the balance sheet.

Journal Entry:
Depreciation Expense Dr. Rs. 1,000
Accumulated Depreciation Cr. Rs. 1,000

**4. Analyze the Journal Entry:**
- Depreciation Expense (Debit): This expense account is debited to reflect the decrease in the value of the fixtures due to depreciation. It is an income statement account and will be reported as an expense on the company's income statement, reducing the net income.
- Accumulated Depreciation (Credit): This contra-asset account is credited to accumulate the total depreciation expense on the fixtures over time. It is a balance sheet account and will be deducted from the cost of the fixtures to determine their net book value or carrying value.

**5. Impact on Financial Statements:**
The journal entry for charging depreciation on fixtures affects both the income statement and the balance sheet. On the income statement, the Depreciation Expense account increases, reducing the net income and ultimately the retained earnings. On the balance sheet, the Accumulated Depreciation account increases, offsetting the value of the fixtures under the fixed assets section.

By properly charging depreciation, businesses can accurately reflect the decrease in the value of their fixed assets over time and distribute the cost of using those assets across multiple accounting periods. This helps in presenting a true and fair view of the company's financial position and performance.

Depreciation A\c dr 1000 To fixtures A\c 1000