Accumulated Depreciation has a normal balance which indicates that it reduces total assets.
Question
Accumulated Depreciation has a normal balance which indicates that it reduces total assets.
Solution
Yes, that's correct. Accumulated Depreciation is a contra asset account, meaning it has a credit balance. It is subtracted from the cost of an asset to determine its book value. Over time, as assets are used, they lose value, which is represented by the Accumulated Depreciation. So, while it appears on the balance sheet as an asset, its normal credit balance reduces the total value of a company's assets.
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