Accounting Dictionary - Accounting Terms & Definitions
A: Accumulated Depreciation
Accumulated depreciation is a share of the original cost of the fixed asset, which was included into expenses in the income statement.
Accumulated depreciation is a contrary account to the cost of the fixed asset, i.e. when the acquisition cost of the fixed asset is gradually included into the Income Statement, Depreciation Expenses account is debited and Accumulated Depreciation account is credited. On the Balance Sheet acquisition cost of the fixed asset is decreased by the accumulated depreciation and Net Book Value, i.e. difference between cost of fixed asset and accumulated depreciation, is indicated on the Balance Sheet.
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