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Accumulated depreciation is a Contra account. A contra account is an asset account where the balance will be either a credit balance or zero balance. Since a credit balance in an asset account is contrary to the normal or expected debit balance the account is called a contra asset account. Accumulated depreciation is associated with PPE and it is credited when depreciation expense is recorded. Recording the credits in the accumulated depreciation means that the cost of the property, plant and equipment will continue to be reported. Reporting the accumulated depreciation separately allows the readers of the statement of the financial position to see how much of the cost has been depreciated and how much has not yet been depreciated.
Accumulated depreciation is a contra asset account reflects the consumed amount of the asset usful life up to the closing date of the period.
Accumulated depreciation is a Contra account. A contra account is an asset account where the balance will be either a credit balance or zero balance. Since a credit balance in an asset account is contrary to the normal or expected debit balance the account is called a contra asset account
