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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
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 |
Capital | 1,00,000 |
Sales | 1,20,000 |
Purchases | 1,10,000 |
Sales Return | 20,000 |
Fixed Assets | 1,00,000 |
Cash at bank | 10,000 |
Accumulated Depreciation | 20,000 |
Solution :