accumulated depreciation account type

The accumulated depreciation account type is a contra-asset account used in accounting to track the total depreciation of a company’s fixed assets over time. It reflects the cumulative amount of depreciation expense deducted from the original cost of assets, such as buildings, machinery, or equipment. This account type reduces the asset’s book value on the balance sheet while helping businesses calculate the asset's remaining useful life. Understanding the accumulated depreciation account type is crucial for accurate financial reporting, tax calculations, and asset management. Learn how this account plays a vital role in maintaining accurate and transparent financial statements.