Accumulated Depreciation

Question

Quizplus · Accepted Answer

Accumulated Depreciation increases when the monthly adjustment for depreciation is recognized because it is the total amount of depreciation expense recognized over the life of an asset. As each month's depreciation expense is recognized, it is added to the accumulated depreciation account. Option B is incorrect because the accumulated depreciation account decreases only when an asset is sold, scrapped, or otherwise disposed of. Option C is incorrect because accumulated depreciation is a contra-asset account and is reported on the balance sheet, not the income statement. Option D is incorrect because accumulated depreciation is not allocated as an expense in future periods.