The total amount of depreciation expense that has been allocated for an asset since the asset was put into use.

• A. Depreciation
• B. Depreciation expense
• C. Service life
• D. Accumulated depreciation

Answer: (D)

The concept being tested is how depreciation accumulates over time. The total amount of depreciation expense allocated for an asset since it was put into use is accumulated depreciation. This value sits on the balance sheet as a contra-asset, reducing the asset’s book value by the sum of all depreciation recorded to date. Each period you record depreciation expense (the amount for that period), and when you add up all those periods, you get accumulated depreciation. Depreciation expense is the amount recognized in the current period, not the total to date, and service life is the asset’s expected usable period, not the accumulated amount.