Accumulated depreciation is an example of what type of account?

Accumulated depreciation is an example of a contra asset account.

A contra account is paired with a related account but has the opposite normal balance. Accumulated depreciation is linked to assets such as buildings, vehicles, and equipment. Because asset accounts normally have debit balances, accumulated depreciation normally has a credit balance and reduces the asset’s carrying amount.

For example, if equipment cost $17,000 and accumulated depreciation is $6,000, its book value is $11,000 before considering other adjustments. Keeping the original cost and accumulated depreciation in separate accounts preserves the historical cost while showing how much of the asset’s depreciable cost has been allocated to prior periods.

A common mix-up is confusing accumulated depreciation with depreciation expense. Depreciation expense is recognized on the income statement for the current period; accumulated depreciation is the cumulative balance-sheet total from all prior depreciation entries. Depreciation is also non-cash: recording the expense does not itself create a current cash payment. The account continues to grow until the asset is disposed of, fully depreciated, or otherwise removed from the books.