Which of the following is a characteristic of accumulated depreciation account?
A) Accumulated depreciation represents cash reserved for asset replacement.
B) Accumulated depreciation account is a contra-liability account.
C) Accumulated depreciation may be disclosed in the notes to the income statement.
D) Accumulated depreciation is reported on the balance sheet as a deduction from the cost of the asset.

Question

Quizplus · Accepted Answer

Accumulated depreciation is reported on the balance sheet as a deduction from the cost of the asset, reducing the net book value of the asset. This is because accumulated depreciation represents the total amount of depreciation related to the asset that has been charged to expense over its useful life.

Which of the Following Is a Characteristic of Accumulated Depreciation