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JIA Quiz

Which of the following best describes the account classification and normal balance of Accumulated Depreciation?

A. Asset account with a normal debit balance

[X] Incorrect. Accumulated depreciation offsets asset values, so it carries a credit balance rather than a debit balance.

B. Liability account with a normal credit balance

[X] Incorrect. Although it has a credit balance, it represents an asset valuation offset rather than an obligation owed to third parties.

C. Contra-asset account with a normal credit balance

[V] Correct! Accumulated depreciation is a contra-asset account that reduces fixed asset carrying values and carries a credit balance.

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