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Definition

Contra asset account

Accumulated Depreciation- Office Equipment is a contra asset account which is an account offset against an asset account on the balance sheet. This accumulated depreciation account appears just after the account it offsets (in this case, Office Equipment) on the balance sheet. Its normal balance is a credit.

An alternative to using a contra asset account would be to decrease (credit) the asset account (e.g., Office Equipment) directly for the depreciation each month. But use of the contra account is preferable for a simple reason: it discloses both the original cost of the equipment and the total cost that has expired to date.

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