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:
A)Is referred to as depreciation expense
B)Is referred to as accumulated depreciation
C)Is shown on the income statement of the final period
D)Is only recorded when the asset is disposed of
E)Is 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 subtracted from the asset's cost to determine its net book value. It is not the same as depreciation expense, which is the amount of depreciation charged to expense in a particular period. Accumulated depreciation is shown on the balance sheet, not the income statement, and it is recorded throughout the asset's useful life, not just when it is disposed of. Accrued assets are recorded when a company has earned revenue but has not yet received payment.

The Total Amount of Depreciation Recorded Against an Asset or Group