What is Accumulated Depreciation
Accumulated Depreciation:- It is the total of Depreciation Expense already charged to expense in the previous accounting periods. The closing balance of Accumulated Depreciation or Allowance For Accumulated Depreciation is calculated by preparing Accumulated Depreciation T Account. For the 1 st year of Fixed Assets / No n Current Assets , the Accumulated Depreciation during Current Accounting Period having the same amount as the Depreciation Expense. After that, previous years’ depreciation is added to opening balance and closing balance of Accumulated Depreciation is deducted from relevant Fixed Assets’ closing balance that is why Accumulated Depreciation is a Contra Asset Account . Accumulated Depreciation Journal Entry When Depreciation on Fixed Asset is charged, then Depreciation Expense is Debited and Accumulated Depreciation is credited. Suppose, Machinery Costing Rs. 11000 and Residual Value 1000, is charged at 10% Per Annum...