depreciation is which type of account

Depreciation is considered a contra asset account in accounting. It represents the reduction in value of a fixed asset over time due to wear and tear, age, or obsolescence. While it is linked to asset accounts, depreciation offsets their value on the balance sheet. Learn how depreciation impacts financial statements, helps businesses allocate expenses, and ensures accurate tax reporting. Discover the different methods of calculating depreciation and how they affect your accounting practices