Asked by Christian Broussard on Jun 10, 2024
Verified
Accumulated depreciation is a/an
A) expense account.
B) liability account.
C) contra-asset account.
D) owners' equity account.
Accumulated Depreciation
The total amount of depreciation expense that has been charged against a fixed asset since it was put into use, representing the wear and tear over time.
Contra-Asset Account
An account that offsets or reduces the balance of its related asset account, such as accumulated depreciation reducing the carrying value of fixed assets.
Liability Account
An accounting record that represents a company's legal debts or obligations that arise during business operations.
- Gain insight into the distinction and practical implementation of accrual and cash basis accounting.
Verified Answer
BK
Brittany KleinJun 14, 2024
Final Answer :
C
Explanation :
Accumulated depreciation is a contra-asset account that is used to record the depreciation of fixed assets. It is used to offset the cost of the related asset in the balance sheet. It is not an expense account, a liability account, or an owner's equity account.
Learning Objectives
- Gain insight into the distinction and practical implementation of accrual and cash basis accounting.