0
Historical cost based depreciation tends to do what when there is inflation?
Wiki User
∙ 13y ago
HIstorical cost based depreciation tends to increase profits when there is inflation
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
How deprecaition interacts with prudence and matching concepts?
Prudence concept tends to understate the profit . depreciation is a tool through which we record our losses , which means that our profit is declining .This means that depreciation is a supportive tool for reducing profit. Matching concept tends to record the expense to the revenue generated from the assets . Hence depreciation fulfils the requirements of both the concepts .
Diminishing balance method?
Think along the lines of Compound Interest (but in reverse) For example- Asset of 100 depreciating by 20% p.a On Straight Line Year1 Asset 100 Depreciation 20 Year2 Asset 80 Depreciation 20 Year3 Asset 60 Depreciation 20 Year4 Asset 40 Depreciation 20 Year5 Asset 20 Depreciation 20 Year6 Asset 0 On Diminishing Balance Year1 Asset 100 Depreciation 20 Year2 Asset 80 Depreciation 16 Year3 Asset 64 Depreciation 12.8 Year4 Asset 51.2 Depreciation 10.24 Year5 Asset 40.96 Depreciation 8.192 Year6 Asset 32.77 .... and so on until the asset tends to 0 (will never technically reach 0)
Why is a database more appropriate than a spreadsheet?
The answer to this depends on the exercise being undertaken A spreadsheet tends to be used where values change. A datebase tends to be used to store unchanging records.
What is the inventory method that tends to smooth out erratic changes in costs?
fifo
Inventory valuation method that tends to smooth out erratic changes in cost?
Weighted Average
When oil and energy prices rise the economy tends to experience what type of inflation?
natural inflation
How deprecaition interacts with prudence and matching concepts?
Prudence concept tends to understate the profit . depreciation is a tool through which we record our losses , which means that our profit is declining .This means that depreciation is a supportive tool for reducing profit. Matching concept tends to record the expense to the revenue generated from the assets . Hence depreciation fulfils the requirements of both the concepts .
Inflation in the us economy tends to be?
Inflation in the U.S. economy tends to be: Question 8 options:a)a finite, one-time event resulting from a shock. b)ongoing, as increases in aggregate demand outpace increases in aggregate supply. c)a finite, one-time event as the Fed actively works to eliminate all inflation. d)ongoing, as aggregate supply is continually shifting to the left.
Diminishing balance method?
Think along the lines of Compound Interest (but in reverse) For example- Asset of 100 depreciating by 20% p.a On Straight Line Year1 Asset 100 Depreciation 20 Year2 Asset 80 Depreciation 20 Year3 Asset 60 Depreciation 20 Year4 Asset 40 Depreciation 20 Year5 Asset 20 Depreciation 20 Year6 Asset 0 On Diminishing Balance Year1 Asset 100 Depreciation 20 Year2 Asset 80 Depreciation 16 Year3 Asset 64 Depreciation 12.8 Year4 Asset 51.2 Depreciation 10.24 Year5 Asset 40.96 Depreciation 8.192 Year6 Asset 32.77 .... and so on until the asset tends to 0 (will never technically reach 0)
What is the effect of a raise in discount rates?
Discount rate = inflation expectation + risk premium for the investment, so when inflation goes up, your discount rate should go up
Man mind and woman mind difference?
No gender based difference. Generally man tends to long term planning and tends to overview picture while woman tends to short term planning and tends to detailed picture.
What is a party era?
Historical periods in which a majority of voters cling to the party in power, which tends to win a majority of the elections.
What is creeping inflation?
Creeping Inflanation are the circumstance where the inflation of a nation increases gradually, but continually, over time. This tends to be a typically pattern for many nations. Although the increase is relatively small in the short-term, as it continues over time the effect will become greater and greater.
Do the straight-line method and the production method and the double-declining-balance method differ in their effect on the company's profitability?
Yes, the choice of depreciation method can affect a company's profitability. The straight-line method evenly distributes depreciation over the useful life of an asset, which can lead to stable financial statements. The production method ties depreciation expense to the level of production, impacting profitability based on usage. The double-declining-balance method accelerates depreciation in earlier years, potentially impacting profitability by reducing taxable income.
What is the salary of Google employees?
The salaries will obviously vary based on the employee's specific job, but the average tends to be around $115,000.
What factors would contribute to a very high or very low pH in urine?
a large component of meat in the diet tends to decrease pH, while a large component of plant-based material in the diet tends to increase pH
How does inflation affect the balance of payments?
Inflation affects low income earners more than high income earners. This is because low income earners' income tends not to rise as quickly as prices, therefore, their purchasing power decreases. Also, low income earners do not have the skills to demand higher wages. It should be noted that high inflation generally leads to interest rate increases. This affects low income earners' cost of living and compounds the other affects of inflation. So, inflation decreases purchasing power of low income earners relative to high income earners, whose income increase as quick as inflation. Ultimately, income distribution becomes less equal.
