The balance in Accumulated Depreciation represents the
A)cash fund to be used to replace plant assets.
B)amount to be deducted from the cost of the plant asset to arrive at its fair market value.
C)amount charged to expense in the current period.
D)amount charged to expense since the acquisition of the plant asset.

Question

Quizplus · Accepted Answer

Accumulated Depreciation represents the total amount charged to expense since the acquisition of the plant asset. It is the cumulative depreciation recorded for the plant asset up to a specific point in time. Option A is incorrect as it refers to a cash fund, while Accumulated Depreciation is not a cash fund. Option B is incorrect as accumulated depreciation is not subtracted from the cost of a plant asset to determine its fair market value. Option C is incorrect as it refers to the depreciation expense for a particular period, while Accumulated Depreciation is a running total of all the depreciation expenses charged since the asset was acquired.

The Balance in Accumulated Depreciation Represents the