9/16/2023 0 Comments Accumulated depreciation assets![]() Each year the account Accumulated Depreciation will be credited for $9,000. ![]() Example of Accumulated DepreciationĪssume that a company purchased a delivery vehicle for $50,000 and determined that the depreciation expense should be $9,000 for 5 years. Hence, the credit balance in the account Accumulated Depreciation cannot exceed the debit balance in the related asset account. Subtracting accumulated depreciation from an asset's cost results in the asset's book value or carrying value. Accumulated Depreciation is credited when Depreciation Expense is debited each accounting period. Accumulated depreciation (and the related depreciation expense) are associated with constructed assets such as buildings, machinery, office equipment, furniture, fixtures, vehicles, etc.Īccumulated Depreciation is also the title of the contra asset account. What is accumulated depreciation? Definition of Accumulated DepreciationĪccumulated depreciation is the total amount of a plant asset's cost that has been allocated to depreciation expense (or to manufacturing overhead) since the asset was put into service. ![]()
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