The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day-to-day operations of the business is:
A)Referred to as depreciation expense.
B)Referred to as accumulated depreciation.
C)Shown on the income statement of the final period.
D)Only recorded when the asset is disposed of.
E)Referred to as an accrued asset.

Question

Quizplus · Accepted Answer

Accumulated depreciation is the total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day-to-day operations of the business. It is a contra asset account that is used to reduce the book value of the asset on the balance sheet. It is not shown on the income statement and is recorded throughout the life of the asset, not just when it is disposed of. Accrued assets are assets that have been earned but not yet received, and is not related to depreciation.

The Total Amount of Depreciation Recorded Against an Asset or Group