Distinguish differences between depreciation expense that's reported on the income statement and accumulated depreciation, which is a running total.

When you draw up this year's balance sheet, you add this year's depreciation to all the depreciation you claimed in previous years. The total gives you the current accumulated depreciation entry.

As a contra-asset account, accumulated depreciation has a normal credit balance. This simply means that increases to accumulated depreciation are credited, while decreases to the account are debited.

The accumulated depreciation is increased by $160 per year on the balance sheet. Since the company purchased the computer six years ago, accumulated depreciation has grown to $960 ($160 X 6).

Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.

Accumulated depreciation appears in a contra account on the balance sheet reducing the gross value of fixed assets reported.

Every investor should look at a company’s balance sheet. It tells you how much money the company has, owes, and what’s left over when you put the two together. But to properly value a company, you ...

The balance sheet will show a gross fixed assets value, a contra account value for accumulated depreciation, and a net value. All three values can be useful for investors depending on what they're ...

At the same time, the book value of the equipment will reduce on the balance sheet by that same $1,500 per year. The reduction in book value is recorded via an account called accumulated depreciation.

Accumulated depreciation appears in a contra account on the balance sheet reducing the gross value of fixed assets reported.

Accumulated depreciation isn't usually listed separately on the balance sheet where long-term assets are shown at their carrying value net of accumulated depreciation.