Depreciation Expense vs. Accumulated Depreciation

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Edspira
Published at : 16 Dec 2020
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Some people are confused by the accounts Depreciation Expense and Accumulated Depreciation, since they both contain the word "depreciation." These accounts are quite different, however: Depreciation Expense belongs on the Income Statement, whereas Accumulated Depreciation belongs on the Balance Sheet. Whereas Accumulated Depreciation is a contra-asset that reduces a company's assets (it is subtracted from Property, Plant, and Equipment), Depreciation Expense is an expense that reduces a company's profit.

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