Sunday, April 20, 2008

Accumulated Depreciation Balance Sheet

Example Accumulated Depreciation Statement:

True or False: If you add up all the depreciation expenses from each year of a company's existence, that would equal its depreciation costs?

FALSE

Accounting Explanation:

Accumulated depreciation represents the sum of all depreciation expenses on the firm's fixed assets. Yet, it only represents the accumulated depreciation of the firm's existing assets. Assets that have retired are deleted from the balance sheet, along with their associated accumulated depreciation.

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