what account is depreciation

Depreciation is recorded in accounting as an expense account and a contra asset account. The depreciation expense represents the cost of an asset spread over its useful life, reducing the value of fixed assets like machinery, buildings, or equipment. The contra asset account called "accumulated depreciation" tracks the total depreciation taken on an asset over time, reducing its book value on the balance sheet. This accounting treatment helps businesses reflect the gradual wear and tear or obsolescence of assets while managing tax obligations and providing accurate financial reporting.