Why accumulated depreciation account?


Accumulated depreciation-the cumulative depreciation of the asset, which was recorded.

Fixed assets such as property, plant and equipment long-term assets. Instead of recording the value of assets in the year they are acquired, the asset amortiziruemoe.

Depreciation expense part of the cost of the asset in the year it was purchased and each year until the end of the useful life of the asset. Depreciation allows the company to distribute the cost of an asset over its useful life, so that revenue can be obtained from the asset. Attenuation prevents significant costs can be recorded in the year the asset was purchased.

Accumulated depreciation the total amount of depreciation, which still is recorded for this asset. In other words, is the total amount of the depreciation expense that has been recorded for many years.

Each year, the account depreciation expense is debited write-off of assets this year, and accumulated depreciation is credited by the same amount. Over the years, accumulated depreciation increases as the cost of depreciation is charged on cost of fixed assets.

When an asset is retired or sold, the total amount of accumulated depreciation associated with this asset is reversed completely remove the asset record from the books of the company.

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