An increase in accumulated depreciation:
A)increases total assets.
B)decreases total assets.
C)decreases the current ratio.
D)increases the quick ratio.

Question

Quizplus · Accepted Answer

Accumulated depreciation is a contra-asset account which has a normal credit balance. It accumulates over the useful life of the asset and reduces the book value of the asset. Thus, an increase in accumulated depreciation decreases the value of assets, resulting in a decrease in the total assets.

An Increase in Accumulated Depreciation