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

Acme inc. has total liabilities of $120, Acme Inc. has total liabilities of...

Acme Inc. has total liabilities of $120,000, total sales of $80,000, net income of $12,000, current assets of $90,000 and total assets of $150,000. What is the debt to equity rat

Journal, Why to and by using in journal, trading a/c, p&l a/c and ledger?

Why to and by using in journal, trading a/c, p&l a/c and ledger?

Explain about accounting transaction, Q. Explain about Accounting transacti...

Q. Explain about Accounting transaction? An accounting transaction is a business event or activity that causes a measurable change in the accounting equation Assets = Liabiliti

Liz marett is the chief financial officer, Liz Marett is the chief financia...

Liz Marett is the chief financial officer for Fulton Restaurants. She delivered the following comments in a recent conference call with analysts that follow the company: "20X5

An invoice for product x totals $1, An invoice for product X totals $1,200 ...

An invoice for product X totals $1,200 and is dated July 6, 2000 with terms 2/10-60X. If the invoice is paid on September 3, 2000, what is the net amount of payment? A. $912

I need help in a project on ''accounting process'', I need help in a projec...

I need help in a project on 'accounting process' . It should begin with a storyline in which a buisness have to be chosen(i have chosen a tyres dealer). Then transactions taking

Provision for depreciation, Why is a provision for depreciation made in the...

Why is a provision for depreciation made in the financial statements? A to charge the cost of non-current assets against profits B to make a provision for repairs C to mak

Owner got personal loan from his bank and sign note, owner got personal loa...

owner got personal loan from his bank and sign note payable.what is the journal entries?

Show sales returns and allowances, Q. Show Sales returns and allowances? ...

Q. Show Sales returns and allowances? Sales returns and allowances Merchandising companies typically permit customers to return goods that are defective or unsatisfactory for a

Determine the estimated direct labor, 1. Shaving 5% of the estimated direct...

1. Shaving 5% of the estimated direct labor hours in the predetermined overhead rate will result a high overhead rate, which would likely result a high credit balance of overapplie

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