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

#title.blessing., Implication of applying accounting concept wrongly

Implication of applying accounting concept wrongly

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

Depreciation, basic methods for calculating depreciation

basic methods for calculating depreciation

General principles of accounting, Q. General principles of accounting? ...

Q. General principles of accounting? Organizations that have contributed towards the development of the principles are the 1)American Institute of Certified Public Accountants

Accounts payable subsidiary ledger, Accounts payable subsidiary ledger ...

Accounts payable subsidiary ledger Accounts are designed to show balance owed to every creditor. Liability accounts generally have credit balances. Accounts are not assigned nu

Illustrate about the matching principle, Illustrate about the matching prin...

Illustrate about the matching principle  This principle requires that expenses and revenue be recorded in accounting period in which they occur. For a net income figure to be a

What is asset cost and estimated residual value, Q. What is Asset cost and ...

Q. What is Asset cost and Estimated residual value? Asset cost: The asset cost is the sum that a company paid to purchase the depreciable asset. Estimated residual value:

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?

Prepare a capital investment appraisal analysis, XYZ plc provides engineeri...

XYZ plc provides engineering and consultancy services to the oil and gas industry.  Over the past few years, they have incurred expenditure of £1m researching and developing a new

Harry and sally were divorced three years ago., Harry and Sally were divorc...

Harry and Sally were divorced three years ago. In July of the current year, their son, Joe, broke his arm falling out of a tree. Joe lives with Sally and Sally claims him as a de

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