Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 9 - Reporting and Analyzing Long-Lived Assets - Questions - Page 482: 6

Answer

The balance in accumulated depreciation is the total amount of the asset's cost that the company has charged to expense to date and it is not a cash fund.

Work Step by Step

Hence, depreciation for an asset does not result in accumulation of cash for replacement of the asset.
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