A contra-asset account, such as allowance for doubtful accounts or accumulated depreciation, has a normal balance of a credit and causes total assets to decrease.
An asset loses value over time as a result of use, damage, or obsolescence. Depreciation is the measurement for this decline. Depreciation, or a decline in asset value, can be brought on by a variety of other variables, such as bad market conditions, etc.
One aspect of your financial strength is credit. Based on your promise to make payments later, it enables you to obtain the goods you need right away, such as a credit card or a loan for a car. Working to raise your credit score increases the likelihood that you'll be approved for loans in the future.
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