True or false: Accumulated Depreciation is a contra-account to a long-lived asset account, such as Equipment. This means that it is added to and increases the balance of the long-lived asset in the balance sheet.
Question
True or false: Accumulated Depreciation is a contra-account to a long-lived asset account, such as Equipment. This means that it is added to and increases the balance of the long-lived asset in the balance sheet.
Solution
False. Accumulated Depreciation is indeed a contra-account to a long-lived asset account like Equipment. However, it does not increase the balance of the long-lived asset. Instead, it decreases the book value of the asset. It represents the total amount of depreciation expense that has been recognized to date since the asset was put into use. It is subtracted from the asset's cost to arrive at the net book value that appears on the balance sheet.
Similar Questions
Accumulated depreciation is an: A. contra revenue account. B. liability account. C. contra asset account. D. expense account.
Accumulated Depreciation has a normal balance which indicates that it reduces total assets.
Accumulated Depreciation is defined as: Group of answer choices Depreciation p.a. / Number of years used Depreciation p.a. + Number of years used Depreciation p.a. Depreciation p.a. - Number of years used Depreciation p.a. x Number of years used
As the balance in the Accumulated Depreciation increases, total assets because Accumulated Depreciation is a -account.
The balance in the Accumulated Depreciation account represents the
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