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

The operating expenses section, The operating expenses section Operati...

The operating expenses section Operating Expenses - directly associated to the sale of merchandise General expenses (administrative expenses) related to business's offic

Example of retail inventory method, Q. Example of retail inventory method? ...

Q. Example of retail inventory method? In Exhibit we display the retail inventory method. In the exhibit the costs (USD 22000) as well as retail (USD 40000) amounts for beginni

Location based commerce, .1  INTRODUCTION The world keeps developing new w...

.1  INTRODUCTION The world keeps developing new ways and technologies to help do things and achieve a timeline shorter compared to the way it previously used to be done. New techn

Show purchase returns and allowances account, Q. Show Purchase Returns and ...

Q. Show Purchase Returns and Allowances account? Both allowances and returns reduce the buyer's debt to the seller and decrease the cost of the goods purchased. The buyer may d

General accepted accounting principles, Q. General accepted accounting prin...

Q. General accepted accounting principles? In general accepted accounting principles (GAAP) set forth standards or methods for presenting financial accounting information. A

Show timing of expense recognition, Q. Show Timing of expense recognition? ...

Q. Show Timing of expense recognition? The timing of expense recognition The matching principle entail that a relationship exists between expenses and revenues. For definite ex

Help, Upper D minus Mobile Wireless needed additional capital to? expand,...

Upper D minus Mobile Wireless needed additional capital to? expand, so the business incorporated. The charter from the state of Georgia authorizes Upper D minus Mobile to issue

Examples of deferred revenue expenditure? , What are examples of deferred r...

What are examples of deferred revenue expenditure? Ans) It is an expenditure the advantage of which will be realized over a period and not during the present period. Ex-Heavy Ad

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