the accumulated depreciation account is

The accumulated depreciation account is a contra asset account used to track the total depreciation expense on a company’s fixed assets over time. This account reduces the book value of assets like equipment, machinery, and buildings on the balance sheet, reflecting their decreasing value due to wear and tear or obsolescence. While it does not represent an actual out-of-pocket expense, it provides a more accurate reflection of an asset’s current value for financial reporting and tax purposes.