accumulated depreciation is what type of account

Accumulated depreciation is a contra asset account used in accounting to track the total depreciation of a company’s fixed assets over time. It represents the portion of an asset’s value that has been expensed due to wear and tear, usage, or obsolescence. Unlike asset accounts, which show the original cost of an asset, accumulated depreciation is subtracted from the asset's original value on the balance sheet to determine its net book value. This account helps businesses accurately reflect the depreciated value of their assets for financial reporting and tax purposes. Understanding accumulated depreciation is crucial for businesses to maintain accurate financial records and comply with accounting standards.