accumulated depreciation type of account

Accumulated Depreciation is a contra-asset account used in accounting to track the total depreciation of an asset over its useful life. This account records the cumulative amount of depreciation expense applied to a fixed asset, such as machinery, buildings, or equipment, reducing its book value. Unlike asset accounts, accumulated depreciation does not represent a physical asset but instead reflects the wear and tear or obsolescence of an asset over time. It is subtracted from the original cost of the asset on the balance sheet, helping businesses assess the remaining value of their assets and ensuring accurate financial reporting.