Question

An accumulated depreciation account has a normal credit balance. increases on the debit side. is a contra-liability account. is offset against total assets on the balance sheet.

Answer 1

Answer: In an accumulated depreciation account, there is a normal credit balance.

Explanation:

Accumulated depreciation has a normal credit balance as a result of the aggregation of the amount of expenses on depreciation that is charged against the fixed assets. The accumulated depreciation account is matched together with the fixed assets on the balance sheet. This is done in order to know the remaining worth of the fixed assets.

The amount of the accumulated depreciation tend to increase as more depreciation is put against the fixed assets which results in a lower book value. On a balance sheet, fixed assets have a debit balance so the accumulated depreciation must be written on the credit balance so as to offset the fixed assets.