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DEPRECIATION is the cost we consider expired already relative to the use of the thing (asset) or passage of time or obsolescence. This is computed in several ways e.g straight line , double declining, sum of years digit etc. but the most common is straight line. To understand it better we compute it this way using straight line: (Cost of an Asset - Salvage value) / life of an asset in years = annual depreciation. Salvage value is the estimated value at the end of assets life or simply the value this asset can still be disposed. It is something that causes property, whether it be a home or a car to lessen in value over time.
What else can I help you with?
Does accumulated depreciation increase with a credit?
accumulated depreciation is an asset, so it will increase with a debit.
Can depreciation charged at building?
Building is an asset for business and depreciation is only charged to assets of business so in this way depreciation is charged to building as well.
Accumulated depreciation debit or credit?
Accumulated depreciation is a contra account for specific fixed asset so fixed assets has debit balance as normal balance so accumulated depreciation has credit balance as default balance.
How are accumulated depreciation and depreciation related?
Accumulated depreciation and depreciation are related with each other as depreciation is annual expense while accumulated depreciation is the sum of all annual depreciation expenses.
How are accumulated depreciation and depreciation expensese related?
Accumulated depreciation and depreciation are related with each other as depreciation is annual expense while accumulated depreciation is the sum of all annual depreciation expenses.
What is provision of depreciation?
Provision of depreciation is allowance account in which every year fixed amount is put to charged against actual depreciation so that planned income statement can be prepared and profit remains smooth.
Why accumulated depreciation exceed depreciation expense?
Depreciation expenses is for one specific fiscal year while accumulated depreciation is the sum of all depreciation expenses that’s why accumulated depreciation exceeds the depreciation if there is depreciation expense in prior year as well.
How do you calculate GDP mp?
You have to know that Gross includes Depreciation... And market price includes all the taxes... So...for calculation.. You have to add depreciation to domestic income, i.e; NDP at FC + depreciation....you will now get GDP at FC... Factor cost doesn't include Net Indirect TAX...so you have to add that...and you'll get the answer.... NDP at FC + depreciation + NIT = GDP at MP
Distinguish between depreciation policy and the concept of depreciation?
Depreciation policy is management thing that what depreciation method to use and how much depreciation to charge to each asset. Depreciation concepts are concepts which govern the depreciation process which management cannot change they are universal rules to follow depreciation that how straight line depreciation work etc.
Is depreciation included as a cash flow in capital budgeting?
No depreciation is not included as depreciation is allocation of part of assets cost to income statement while in capital budgeting, full cost of asset is already included so if depreciation will also be included then there would be double counting of same asset.
Is accumalted depreciation a liability?
No, even though accumulated depreciation has a credit balance, it is shown under assets. Accumulated depreciation is a contra T-account to a fixed tangible asset. For example, "Accumulated depreciation machines" is a contra T-account to "Machines". Contra T-accounts are presented together with the T-account they are connected with. Therefore, accumulated depreciation is shown on the debit side with assets. As it has a credit balance, the balance is subtracted. (The sign of a T-account 'flips' when the T-account is included on the opposite side on the balance sheet.)
What is the entry for accumulated depreciation?
Debit depreciation accountCredit accumulated depreciation
