💼 Pre-MBA Exam Prep

A contra asset account like accumulated depreciation:

A Increases total assets
B Reduces the carrying value of the related asset on the balance sheet
C Is a liability
D Represents cash outflow

✓ Correct Answer: Option B

Contra asset accounts carry a credit balance that offsets the related asset. Accumulated depreciation reduces the gross value of PP&E to show net book value.

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