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

Forecast cash requirements, We are here left along with statement (d) that ...

We are here left along with statement (d) that defines an accountant as a professional and emphasize his pre-occupation within management of information for internal utilization as

Find out debt to equity ratio, Current Assets are $70,000, non-current asse...

Current Assets are $70,000, non-current assets are $150,000, current liabilities are $40,000 and long term liabilties are $30,000. What is the debt to equity ratio? 0.47 Stock h

The greenwood company purchased equipment costing, The Greenwood Company pu...

The Greenwood Company purchased equipment costing $900. Greenwood paid $400 in cash and agreed to pay the remaining amount in thirty days. As a result of this transaction

Cash flow information: direct and indirect methods, Cash flow information: ...

Cash flow information: Direct and indirect methods The comparative year-end balance sheets of Sign Graphics, Inc., revealed the following activity in the company's current accou

Generally accepted auditing standards, Generally Accepted Auditing Standard...

Generally Accepted Auditing Standards (GAAS) - Standards set by AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA) which concern AUDITOR'S professional qualities and judgme

Establishing the change fund, Establishing the Change Fund Change Fu...

Establishing the Change Fund Change Fund (asset) is debited and Cash is credited. Only time this fund would be used is if the fund is established or increased, just like Pet

Assets, paid rent $200 by cash

paid rent $200 by cash

The dwyer corporation incurred costs of 114000, the Dwyer corporation incur...

the Dwyer corporation incurred costs of 114000 in purchasing a process which it eventually had patented. The patent was issued on July 20x1. To secure the patent, an additional 6

Abc company uses cash basis accounting for its records., ABC Company uses c...

ABC Company uses cash basis accounting for its records. During 2010, ABC collected $400,000 from its customers, made payments of $300,000 to its suppliers for inventory, and paid

Accrual method, Answer the following questions in 200 to 300 words: ...

Answer the following questions in 200 to 300 words: · Nonprofit organizations are required to produce financial statements based on the accrual method of accounting

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