Question
Accumulated depreciation is a contra asset account. True False 1 point
Solution
4.2
(154 Votes)
Angie
Master ยท Tutor for 5 years
Answer
True
Explanation
In accounting, accumulated depreciation refers to the cumulative depreciation of a physical asset (such as machinery, equipment, or buildings) from the time it is acquired and put into use. It reflects the wear and tear of the asset over its useful life. On a balance sheet, accumulated depreciation is listed as a contra asset account. A contra account is used in a general ledger to reduce the value of a related account when the two are netted together. So in this context, the accumulated depreciation will decrease the original cost of the asset, reflecting its use and wear over time.