Enumerate the term - depreciation, Accounting Basics

Assignment Help:

Explain the term- Depreciation

This is a term which is used to describe the expense which results from loss of usefulness of an asset because of age, wear and tear, and obsolescence. This adjustment spreads cost of an asset over its useful life. Calculate annual amount, then monthly. Depreciation is ALWAYS recorded by debiting an expense account named Depreciation Expense and crediting an account called a "Contra Account" (means offsetting or opposite). Balance of this contra-asset account is a credit-opposite of an asset account. Amount isn't displayed as a credit to asset account, however in a separate contra-asset account. There would be an individual account for every of the items which are being depreciated. Some illustrations would be: office equipment, store equipment, delivery truck, automobile, etc. Land is never depreciated as it's considered permanent and is presumed to last forever. Depreciation only refers to allocation of an asset's cost over its estimated useful life. There are numerous ways to conclude depreciation however this class will only use one-the Straight-Line Method.

 


Related Discussions:- Enumerate the term - depreciation

American society of women accountants - aswa, It is a national organization...

It is a national organization of female accountants in America that plans to further the interests of women in the accounting career. The American Society of Women Accountants (ASW

What is managerial accounting information, Q. What is Managerial accounting...

Q. What is Managerial accounting information? A Managerial accounting information is for internal use and provides special information for the managers of a company. The inform

What is cyclic reporting, Q. What is Cyclic reporting? Cyclic reporting...

Q. What is Cyclic reporting? Cyclic reporting and the matching principle necessitate the preparation of adjusting entries. Adjusting entries are journal entries prepared at the

The total assets of capp co. are $600, The total assets of Capp Co. are $60...

The total assets of Capp Co. are $600,000 and its liabilities are equal to two-thirds of its total assets. What is the amount of Capp Co.'s owner's equity?

What is sales discounts account, Q. What is Sales Discounts account? Th...

Q. What is Sales Discounts account? The Sales Discounts account is the contra revenue account to the Sales account. In the income statement the seller deducts this contra reven

Accounts receivable departments, What are the components or materials used ...

What are the components or materials used by Accounts receivable departments? Ans) Accounts Receivable department is very vital department of the company. The responsibilities o

Classify the following items as, Classify the following items as (a) defer...

Classify the following items as (a) deferred expense (prepaid expense), (b) deferred revenue (unearned revenue), (c) accrued expense (accrued liability), or (d) accrued reven

What is the mission of the accounting and finance, what is the mission of t...

what is the mission of the Accounting and Finance Functional Area

Company accounts- issue of debentures, Company took loans of rs 400000from ...

Company took loans of rs 400000from mbl and issued 8% debentures of rs 500000b as collateral security pass journal entries regarding issue of debentures if any and show the loan in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd