The total amount of depreciation recorded against an asset over the entire time the asset has been owned:
A) Is referred to as accumulated depreciation.
B) Is referred to as an accrued asset.
C) Is only recorded when the asset is disposed of.
D) Is referred to as depreciation expense.
E) Is shown on the income statement of the final period.

Question

Quizplus · Accepted Answer

Accumulated depreciation is the total amount of depreciation that has been recorded against an asset over its entire useful life. It is shown on the balance sheet as a contra-asset account and is deducted from the total cost of the asset to arrive at its carrying value. Depreciation expense, on the other hand, is the amount of depreciation that is recorded in each accounting period to allocate the cost of the asset over its useful life. Depreciation expense is shown on the income statement. Accrued asset and showing on the income statement of the final period are not relevant terms in this context. Depreciation is recorded regardless of whether or not the asset is disposed of.

The Total Amount of Depreciation Recorded Against an Asset Over