Question

Is there any difference between accumulated depreciation A/C and depreciation A/C ? If there what's that?

Answer 1

Dear Student,

Yes there is a difference between the two terms. Accumulated Depreciation means sum total of depreciation charged on an asset till date, i.e. from the date when it is purchased whereas depreciation represents the annual depreciation that is to be charged on an asset.

The amount of accumulated depreciation account is shown on Liabilities side of Balance Sheet where as depreciation is represented by deduction from the book value of the assets.

Also, in case accumulated depreciation account is prepared then assets are shown at its book value whereas if depreciation account is prepared then assets are shown at written down value i.e book value less depreciation.

Regards