Accumulated Depreciation And Depreciation Expense Are Classified Respectively As
Accumulated Depreciation And Depreciation Expense are classified respectively as a Contra Asset Account and an expense account, w h ic h is actually a Temporary Account in Accounting i.e. havi ng no b ala nce at t he e nd of t he accou nting period. Accumulated depreciation is deducted from relevant Fixed Asset / N on Current Assets on b ala nce s heet i n order to calculate t he book value of fixed assets on the balance sheet. Depreciatio n expense is recorded in t he I ncome Statement or Profit And Loss Account for t he period as a n indirect expense. It is just an estimated allocation of the cost of a fixed asset over its useful life to show that it will be useful / beneficial for the business activities during such useful life.