Which of the following statements about accumulated depreciation is true?
A) Accumulated depreciation is the amount of depreciation recognised at the date of disposal of the asset.
B) Cost less accumulated depreciation gives net book value.
C) Accumulated depreciation represents the depreciation charge for the current period.
D) Accumulated depreciation is ignored when an asset is sold.

Question

Quizplus · Accepted Answer

Accumulated depreciation is the total amount of depreciation charged to an asset from the date of its acquisition until the reporting date. It is a contra-asset account and is deducted from the cost of the asset to arrive at its net book value. Therefore, option B is correct. Option A is incorrect as accumulated depreciation is not linked to the date of disposal but to the reporting date. Option C is incorrect as it confuses accumulated depreciation with the depreciation charge for the current period. Option D is incorrect as accumulated depreciation is not ignored but is deducted from the asset's cost when calculating the gain or loss on disposal.

Which of the Following Statements About Accumulated Depreciation Is True