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

Determine about the purchasing procedures, Determine the Purchasing Procedu...

Determine the Purchasing Procedures Alarge company would use a "purchasing agent" who heads purchasing department. Small companies would use manager/owner, etc. Seller recei

Explain about the recording purchases, Explain about the RECORDING PURCHASE...

Explain about the RECORDING PURCHASES Source document for recording a purchase of merchandise is purchase invoice. o An instance of a transaction of purchasing merchandise

Career in information systems, Q. Career in information systems? Have y...

Q. Career in information systems? Have you yet heard the sayings knowledge is power or else information is money? When people talk about accounting what they are really talking

Goal of financial reporting, Q. Goal of financial reporting? The second...

Q. Goal of financial reporting? The second goal of financial reporting is to provide information to help present and potential investors and creditors and other users in assess

Audit Reports, Why it is important for independent auditor to be a member o...

Why it is important for independent auditor to be a member of a professional body?

Accounting, Accounting Accounting has evolved and emerged within respo...

Accounting Accounting has evolved and emerged within response to the social & economic requirement of the society. The accounting procedure has its own syntax. The primary sys

Management accounting, The advent of management accounting was the subseque...

The advent of management accounting was the subsequently logical step in the developmental method. The practice of utilizing accounting information like a direct aid to management

Show depreciation formula with example, Q. Show depreciation formula with e...

Q. Show depreciation formula with example? The depreciation formula (straight-line) to calculate straight-line depreciation for a one-year period is: Annual deprecation = (

Requirements for accounting standards, The information contained in publish...

The information contained in published financial statements is of specific importance to external users, as shareholders and investors. Without any information they would not be ca

Deferred payments, Ask question Discuss the export financing under the defe...

Ask question Discuss the export financing under the deferred payment system.#Minimum 100 words accepted#

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