Which statement about asset accounts is true?

• A. Asset accounts record only revenue.
• B. Asset accounts represent the initial value of assets.
• C. Asset accounts are always negative.
• D. Asset accounts are created after depreciation starts.

Answer: (B)

Asset accounts track the resources a company owns and show their value at the time the asset is acquired. When you buy an asset, you record its cost in the asset account, establishing the asset’s original value in the books. Revenue is recorded in revenue accounts, not asset accounts. Asset accounts typically have a debit balance and are not negative, and they aren’t created only after depreciation starts—the asset exists and is recorded before depreciation. Depreciation affects the asset’s carrying value through a separate contra-asset account (accumulated depreciation) and an expense in the income statement, so the asset account itself stays tied to its initial cost while depreciation reduces the net book value.