The Accumulated Depreciation account:

Question

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The Accumulated Depreciation account is a contra asset account, which means it has a credit balance and offsets the balance of the related asset account. It represents the total amount of depreciation expense that has been recorded for a plant asset since it was acquired, and it is subtracted from the asset's original cost to arrive at its net book value. Option A is incorrect because depreciation expense is a separate account used to record the periodic allocation of the asset's cost to expense. Option B is incorrect because the original cost of a plant asset is recorded in a separate asset account, not in the Accumulated Depreciation account. Option D is incorrect because the normal balance of a contra account is opposite to that of its companion account.

The Accumulated Depreciation Account