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What is the purpose of the accumulated depreciation adjustment entry?

A. To decrease liabilities
B. To record depreciation expense
C. To increase assets
D. To close revenue accounts

User Zeagord
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Final answer:

The accumulated depreciation adjustment entry is made to record the depreciation expense of a tangible asset over its useful life, reducing the gross amount of fixed assets on the balance sheet.

Step-by-step explanation:

The purpose of the accumulated depreciation adjustment entry is B. To record depreciation expense. This entry is made in accounting to allocate the cost of a tangible asset over its useful life. Accumulated depreciation is shown on the balance sheet as a contra asset account, reducing the gross amount of fixed assets. For example, if a company buys a piece of machinery for $10,000 and expects it to last 10 years, the company might charge $1,000 of depreciation expense annually, resulting in an accumulated depreciation adjustment entry of $1,000 each year.

User Sky Kelsey
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