The Type of Account And Normal Balance of Accumulated Depreciation Is What?
Accumulated Depreciatio n is a Contra Asset Account and normal or usual or favourab le or positive b ala nce is credit w hile negative or unfavourable b ala nce is deb it. Actually, accumulated depreciatio n is deducted from relevant fixed assets on b ala nce s heet i n order to calculate t he b ook value or writte n down value of fixed assets. For example, accumulated depreciation a nd depreciation for the year on building is Rs. 50000 duri ng t he first accounting period. Depreciation for t he year is a n estimated expe nse w hic h is recorded i n I ncome Stateme nt or Profit a nd Loss Accou nt w hile Accumulated depreciation is deducted from the origi nal cost of buildi ng in order to calculate t he b ook value or writte n down value of b uildi ng w hic h is here as Rs. 450000 (500000 - 50000) w here as original cost of buildi ng is Rs. 500000 . The adjusting entry...