The total assets of a dairy products manufacturing company are calculated. However, a sum of $5 million from the value of the company's property, plant, and equipment assets is not taken into account as the machinery is bound to become unusable after a certain period of time. In the context of balance sheets, the amount of $5 million that is subtracted from the original value of the total assets is called _____.
A) deferred income
B) bequest value
C) accumulated depreciation
D) laid-down cost

Question

Quizplus · Accepted Answer

Accumulated depreciation is the total amount of depreciation expense that has been recorded against an asset since it was acquired. It represents the reduction in value of the asset over time due to wear and tear, obsolescence, or other factors.

The Total Assets of a Dairy Products Manufacturing Company Are