contra asset account
The accumulated depreciation account is a contra asset account on a company’s balance sheet, meaning it has a credit balance.

Is accumulated depreciation store equipment a liability?

Accumulated depreciation is the grand total of all depreciation expense that has been recognized to date on a fixed asset. It is not a liability, since the balances stored in the account do not represent an obligation to pay a third party.

What type of account is accumulated depreciation on vehicles?

Accumulated depreciation is a contra asset account, meaning its natural balance is a credit that reduces the overall asset value.

What do you mean by accumulated depreciation-equipment?

What is Accumulated Depreciation – Equipment? Accumulated depreciation – equipment is the aggregate amount of depreciation that has been charged against the equipment asset. The account has a natural credit balance. The balance in this account is paired with the equipment fixed asset account to arrive at the net book value of all equipment.

How is accumulated depreciation related to net book value?

Accumulated depreciation – equipment is the aggregate amount of depreciation that has been charged against the equipment asset. The account has a natural credit balance. The balance in this account is paired with the equipment fixed asset account to arrive at the net book value of all equipment.

How does accumulated depreciation affect the carrying value of an asset?

Subtracting accumulated depreciation from an asset’s cost results in the asset’s book value or carrying value. Hence, the credit balance in the account Accumulated Depreciation cannot exceed the debit balance in the related asset account.

Why is accumulated depreciation a contra asset account?

Since Accumulated Depreciation will have a continually increasing credit balance it is referred to as a contra asset account .