Which account is generally not subject to depreciation?

Inventory is generally not subject to depreciation because it consists of goods that are held for sale in the normal course of business. Instead of depreciating, inventory is typically accounted for using methods such as FIFO (First In, First Out), LIFO (Last In, First Out), or weighted average cost. These methods help allocate the cost of inventory to the cost of goods sold when the inventory is sold, rather than spreading the cost over time as with depreciation.

In contrast, equipment, buildings, and furniture are long-term assets that deteriorate and lose value over time due to usage, wear and tear, or obsolescence. These assets are depreciated to account for this decline in value, reflecting their usage in generating revenue for the business. Depreciation methods are applied based on the asset's useful life and the company's accounting policies. Therefore, the nature of inventory as a current asset intended for sale distinguishes it from fixed assets that undergo depreciation.