accumulated depreciation account type

An Accumulated Depreciation Account is a contra-asset account used in accounting to record the total depreciation of an asset over time. It offsets the value of assets on the balance sheet and shows the amount of depreciation that has been expensed since the asset was acquired. This account is crucial for tracking the decline in value of fixed assets like machinery, buildings, and equipment due to wear and tear, obsolescence, or usage. The accumulated depreciation is subtracted from the original cost of the asset to determine its book value, providing an accurate representation of the asset’s remaining value.