accumulated depreciation - buildings definition

This is a contra long-term asset account which is credited for the depreciation associated with Buildings. Since it is a balance sheet account, the accumulated depreciation account balance does not close at the end of each year; therefore, its credit balance will increase each year. However, its balance cannot become greater than the cost of the buildings.

When the credit balance in Accumulated Depreciation – Buildings is netted with the cost in the Buildings account, the result is the book value or carrying value of the buildings.

Depreciation Expense – Buildings is the income statement account that is debited when Accumulated Depreciation – Buildings is credited.