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Sapna Takia

How is accumulated depreciation shown in trial balance?

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1 Answer

  1. Accumulated Depreciation in a Trial Balance

    The accumulated depreciation is shown as a “credit item” in the trial balance. Accumulated depreciation is nothing but the sum total of depreciation charged until a specified date. Since in every reporting period, a part of a fixed asset is written off i.e depreciated such accumulated depreciation has a credit balance.

    You should have a glance at the image of an extract of the trial balance given- below it will definitely answer your question in a more effective way.

    Accumulated depreciation in a trial balance

    Accumulated Depreciation

    As mentioned earlier the accumulated depreciation is the sum total of depreciation that an entity has expensed in its profit and loss statement till that date. It’s basically a contra asset account as it reduces the balance in the asset account.

    Illustrative Example,

    Prepare a trial balance of Mr Allen on the basis of given heads of accounts –

    Particulars

    Amount

    Capital1,00,000
    Sales1,20,000
    Purchases1,10,000
    Sales Return20,000
    Fixed Assets1,00,000
    Cash at bank10,000
    Accumulated Depreciation20,000

    Solution :

    Accumulated Depreciation in trial balance


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