diff --git a/erpnext/accounts/doctype/account/test_account.py b/erpnext/accounts/doctype/account/test_account.py
index dc23b2b2d0..9894b9309a 100644
--- a/erpnext/accounts/doctype/account/test_account.py
+++ b/erpnext/accounts/doctype/account/test_account.py
@@ -69,6 +69,7 @@ class TestAccount(unittest.TestCase):
 			acc.account_name = "Accumulated Depreciation"
 			acc.parent_account = "Fixed Assets - _TC"
 			acc.company = "_Test Company"
+			acc.account_type = "Accumulated Depreciation"
 			acc.insert()
 
 		doc = frappe.get_doc("Account", "Securities and Deposits - _TC")
@@ -149,8 +150,8 @@ def _make_test_records(verbose):
 
 		# fixed asset depreciation
 		["_Test Fixed Asset", "Current Assets", 0, "Fixed Asset", None],
-		["_Test Accumulated Depreciations", "Current Assets", 0, None, None],
-		["_Test Depreciations", "Expenses", 0, None, None],
+		["_Test Accumulated Depreciations", "Current Assets", 0, "Accumulated Depreciation", None],
+		["_Test Depreciations", "Expenses", 0, "Expense", None],
 		["_Test Gain/Loss on Asset Disposal", "Expenses", 0, None, None],
 
 		# Receivable / Payable Account
diff --git a/erpnext/assets/doctype/asset_category/asset_category.py b/erpnext/assets/doctype/asset_category/asset_category.py
index e9ef0c7d9e..770b1ee9a4 100644
--- a/erpnext/assets/doctype/asset_category/asset_category.py
+++ b/erpnext/assets/doctype/asset_category/asset_category.py
@@ -23,16 +23,21 @@ class AssetCategory(Document):
 		account_type_map = {
 			'fixed_asset_account': { 'account_type': 'Fixed Asset' },
 			'accumulated_depreciation_account': { 'account_type': 'Accumulated Depreciation' },
-			'depreciation_expense_account': { 'account_type': 'Expense' },
+			'depreciation_expense_account': { 'root_type': 'Expense' },
 			'capital_work_in_progress_account': { 'account_type': 'Capital Work in Progress' }
 		}
 		for d in self.accounts:
-			for account in account_type_map.keys():
-				if d.get(account):
-					account_type = frappe.db.get_value('Account', d.get(account), 'account_type')
-					if account_type != account_type_map[account]['account_type']:
-						frappe.throw(_("Row {}: Account Type of {} should be {} account".format(d.idx, frappe.bold(frappe.unscrub(account)),
-							frappe.bold(account_type_map[account]['account_type']))), title=_("Invalid Account"))
+			for fieldname in account_type_map.keys():
+				if d.get(fieldname):
+					selected_account = d.get(fieldname)
+					key_to_match = account_type_map[fieldname].keys()[0]
+					selected_key_type = frappe.db.get_value('Account', selected_account, key_to_match)
+					expected_key_type = account_type_map[fieldname][key_to_match]
+
+					if selected_key_type != expected_key_type:
+						frappe.throw(_("Row #{}: {} of {} should be {}. Please modify the account or select a different account."
+							.format(d.idx, frappe.unscrub(key_to_match), frappe.bold(selected_account), frappe.bold(expected_key_type))),
+							title=_("Invalid Account"))
 
 
 @frappe.whitelist()
diff --git a/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py b/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py
index cba7f20153..cd190da689 100644
--- a/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py
+++ b/erpnext/stock/doctype/purchase_receipt/test_purchase_receipt.py
@@ -356,8 +356,8 @@ class TestPurchaseReceipt(unittest.TestCase):
 					'accounts': [{
 						'company_name': '_Test Company',
 						'fixed_asset_account': '_Test Fixed Asset - _TC',
-						'accumulated_depreciation_account': 'Depreciation - _TC',
-						'depreciation_expense_account': 'Depreciation - _TC'
+						'accumulated_depreciation_account': '_Test Accumulated Depreciations - _TC',
+						'depreciation_expense_account': '_Test Depreciation - _TC'
 					}]
 				}).insert()