accumulated depreciation type of account

Accumulated depreciation is a contra asset account used to record the total depreciation of a company's fixed assets over time. It tracks the reduction in value of assets such as equipment, vehicles, and buildings due to wear and tear, obsolescence, or usage. Unlike regular asset accounts, accumulated depreciation is subtracted from the related asset's original cost to determine its net book value on the balance sheet. This account helps businesses comply with accounting standards and maintain accurate financial statements by reflecting the true value of their assets after depreciation.