Accumulated Depreciation1) Why does it appear in Assets on Balance Sheet?2) Is it an expense and how does it affect the accounting equation3) Does it appear only on the Balance Sheet4) Does it have a DR or CR balance

Accumulated Depreciation1) Why does it appear in Assets on Balance Sheet?2) Is it an expense and how does it affect the accounting equation3) Does it appear only on the Balance Sheet4) Does it have a DR or CR balance

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 25MC: What is the impact on the accounting equation when a payment of account payable is made? A. both...

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Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Accumulated Depreciation
1) Why does it appear in Assets on Balance Sheet?
2) Is it an expense and how does it affect the accounting equation
3) Does it appear only on the Balance Sheet
4) Does it have a DR or CR balance

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Expert Solution

Step 1

Depreciation is a contra account (asset) in order to get the value of total of net fixed assets it has to be reduced from the fixed assets. Therefore, it appears on the balance sheet as accumulated depreciation.

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