On the balance sheet, the cumulative amount of plant and equipment already expensed is reported in an account called
A)accumulated amortization.
B)accumulated depreciation.
C)amortization expense.
D)depreciation expense.

Question

Quizplus · Accepted Answer

Plant and equipment are depreciated over their useful lives to reflect their gradual wear and tear. The cumulative amount of depreciation taken on the asset since it was placed in service is reported in an account called accumulated depreciation. Option A is not correct as amortization is used for intangible assets such as patents and copyrights. Option C and D are incorrect as they report the current year's amortization/depreciation expense, not the cumulative amounts already expensed.

On the Balance Sheet, the Cumulative Amount of Plant and Equipment