A non-current asset is a resource a business owns or controls and uses for more than one financial year to help earn income — not for resale. Its cost is the purchase price plus all costs of bringing it to its intended use (delivery, installation). It can be bought by cheque (Cr Cash at bank), in cash (Cr Cash in hand), on credit (Cr Trade payables — supplier), or contributed by the owner (Cr Capital).
Spending on non-current assets is capital expenditure (to buy or improve an asset — lasting benefit, recorded as a non-current asset) or revenue expenditure (to operate, repair, or maintain — used up this year, recorded as an expense). Under the materiality theory, a very small capital item may be expensed. Misclassifying expenditure misstates expenses, profit, non-current assets, and equity.
Depreciation spreads a non-current asset's cost over its useful life as a yearly expense (Dr Depreciation of [asset] / Cr Accumulated depreciation of [asset]), following the matching theory. It is a non-cash expense, and net book value = cost − accumulated depreciation is shown instead of cost so as not to overstate the asset's value or profit, following the prudence theory.
The straight-line method gives an equal depreciation amount each year [(Cost − Scrap value) ÷ Useful life]; the reducing-balance method applies a rate to the falling net book value, giving a higher depreciation amount early on (and never subtracts scrap value). Depreciation may be charged for a full year or a partial year by whole months in the year of purchase, as the question states; the consistency theory says keep the same method each year.
To interpret the ledger accounts, read the Particulars column: in the asset account a debit means the asset was bought (by cheque, in cash, or on credit); in the accumulated depreciation account a credit is the year's depreciation. On the Statement of Financial Position, non-current assets are shown at cost, accumulated depreciation, and net book value.