What does the credit balance in the Accumulated Depreciation account represent?
A) the cost of additional equipment purchased this year
B) the amount of depreciation taken in past years
C) the cost of existing equipment sold during the year
D) the amount of depreciation taken in the current year

Question

Quizplus · Accepted Answer

The credit balance in the Accumulated Depreciation account represents the amount of depreciation taken in past years. This account is a contra-asset account that offsets the Equipment or Property, Plant, and Equipment account on the balance sheet. As depreciation is taken each year, the Accumulated Depreciation account is credited until the end of the asset's useful life, at which point the asset and its associated Accumulated Depreciation balance are removed from the balance sheet.

What Does the Credit Balance in the Accumulated Depreciation Account