what account type is accumulated depreciation

Accumulated depreciation is classified as a contra asset account in accounting. It represents the total depreciation expense that has been recorded against a company's fixed assets, such as buildings, machinery, and equipment, over time. The purpose of accumulated depreciation is to reduce the book value of assets on the balance sheet. As a contra asset, it has a credit balance, which offsets the value of the related asset. Understanding accumulated depreciation is crucial for businesses, accountants, and investors to evaluate the real value of assets and the financial health of a company.