Question

True or false: Accumulated Depreciation is a contra-account to a long-lived asset account, such as Equipment. This means that it is added to the balance of the long-lived asset in the balance sheet.

Answer 1

Answer:FALSE

Explanation: Accumulated depreciation is a negative account (contra-account) which Describes the total depreciation amount allotted to an asset since it is put into use. Accumulated depreciation is not added to the balance of the long lived asset in the balance sheet.

When an organization prepares it's balance sheet,it ensures that the depreciation schedule is recorded for all it's assets ensuring that both the cost of the equipment and it's depreciation is documented accordingly. Accumulated depreciation reduces the value of the assets in the balance sheet when added.