In generally accepted accounting principles (GAAP), a similar principle says that expenses must be tallied with the same accounting year in which the related income is formed. Accumulated depreciation and the related depreciation expenditure are related to construction assets such as buildings, furniture, fixtures, office equipment, vehicles, machinery, etc. Accumulative depreciation, also known as accrued depreciation, is a contra-asset account which means a negative asset account that equalizes the total in the asset account to which it is linked.Īccumulated depreciation is the overall depreciation allocated for a fixed asset charged to expense because that asset was purchased and made available for use.
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