Final answer:
Each significant Long-Term Asset (LTA) typically has its own dedicated contra-account to track depreciation, although smaller or similar LTAs can sometimes be grouped together. This allows for accurate tracking of the decrease in value over time, reflective of the specific useful lives and depreciation methods for each asset type.
Step-by-step explanation:
In accounting, the treatment of Long-Term Assets (LTAs) and depreciation typically involves the use of contra-accounts. A contra-account is an account used in the general ledger to reduce the value of a related account. Depreciation is the systematic reduction of the recorded cost of a fixed asset to reflect its decreasing value over time.
Often, each significant LTA will have its own dedicated contra-account. This is because different types of assets can have different useful lives as well as depreciation methods applied to them. For instance, a company may use a 'Vehicles Accumulated Depreciation' contra-account to track depreciation specifically for its fleet of vehicles, and a separate 'Building Accumulated Depreciation' account for its buildings.
However, smaller or similar assets can sometimes be grouped together under a general 'Accumulated Depreciation' account.
However, it's important to note that the approach can vary depending on the company's accounting policies, the complexity of the asset structures, and the requirements of the applicable accounting standards.