What is the term for the total decrease in an item's value over a period of time?

• A. Accumulated Depreciation
• B. Market Value Reduction
• C. Depreciation Threshold
• D. Asset Devaluation

Answer: (A)

The term for the total decrease in an item's value over a period of time is "Accumulated Depreciation." Accumulated depreciation refers specifically to the total amount of depreciation expense that has been recorded against an asset since it was acquired. This concept is crucial in accounting and financial reporting as it allows for more accurate reflection of an asset’s value on the balance sheet.

This term distinguishes itself from other concepts like market value reduction and asset devaluation, which may describe changes in value from market fluctuations or economic conditions rather than the systematic allocation of cost over time. Thus, accumulated depreciation provides a clear and standardized way to account for the wear and tear, usage, and obsolescence of tangible assets, making it a fundamental aspect of financial accounting for businesses.