When preparing the financial statements, Accumulated Depreciation is recorded
A)as an addition in the asset section of the balance sheet.
B)as a subtraction from revenues on the income statement.
C)as an addition in the liabilities section of the balance sheet.
D)as a subtraction in the asset section of the balance sheet.

Question

Quizplus · Accepted Answer

Accumulated Depreciation is a contra-asset account and is subtracted from the related asset account in the asset section of the balance sheet. This reduces the overall value of the asset and reflects its current book value on the balance sheet.

When Preparing the Financial Statements, Accumulated Depreciation Is Recorded