Question

1. The account’s Accumulated Depreciation:

A) has a credit balance and is reported on the income statement
B) has a credit balance and is reported on the balance sheet
C) has a debit balance and is reported on the balance sheet
D) has a debit balance and is reported on the income statement

Answer 1

B) has a credit balance and is reported on the balance sheet

Step-by-step explanation:

The accumulated depreciation is a total amount of depreciation expense over a period of time. The depreciation is an expense and has a debit balance which is shown in the income statement whereas accumulated depreciation has a credit balance shown in the balance sheet.

The journal entry is shown below for better understanding:

Depreciation expense A/c Dr

To accumulated depreciation

(Being the depreciation expense recorded)

Moreover, the accumulated depreciation treatment on the balance sheet is presented below:

Fixed assets xxx

Less - accumulated depreciation (xxx)

Net value after depreciation xxx