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What factors do you take into account in determining the amount of depreciation?
Wiki User
∙ 13y ago
You need to consider the useful life if the asset. The risidual income you expect to get from selling it on. And whether you are using straight line or reducing balance.
Wiki User
∙ 13y ago
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The balance of accumulated depreciation account represents the?
amount charged to depreciation expense since the acquisition of the plant asset.
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.
What is lost depreciation tax shield?
Lost depreciation tax means that loss of that tax amount which could be saved if there would be depreciation expenses in profit and loss account which will reduce the profit and hence the tax as well.
The balance in the Accumulated Depreciation account represents the?
amount charged to expense since the acquisition of the plant asset.
How does depreciation reduce a taxes?
Depreciation is charged in profit and loss account as expense and it reduces the amount of net profit so in this way it also reduces the income tax payable.
What is the purpose of depreciation expense and accumulated depreciation?
Depreciation expense reduce the cost of asset through income statement for the useful life of asset and accumulated depreciation account is contra account for asset account in balance sheet to show the total amount of depreciation charged.
The balance of accumulated depreciation account represents the?
amount charged to depreciation expense since the acquisition of the plant asset.
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.
What is lost depreciation tax shield?
Lost depreciation tax means that loss of that tax amount which could be saved if there would be depreciation expenses in profit and loss account which will reduce the profit and hence the tax as well.
The balance in the Accumulated Depreciation account represents the?
amount charged to expense since the acquisition of the plant asset.
How does depreciation reduce a taxes?
Depreciation is charged in profit and loss account as expense and it reduces the amount of net profit so in this way it also reduces the income tax payable.
What contra account is used when recording and reporting the effects of depreciation and why is it used?
The contra account that is used when recording and reporting the effects of depreciation is called amortization of assets. This account is used to reduce the dollar amount of the asset periodically over time to bring assets to current costs.
Why depreciation is not same amount each year?
why depreciation is not same amount each year?
Accumulated depreciation in Accounting?
Accumulated depreciation is contra account to fixed asset to show how much amount of depreciation is charged till date from date of purchase and it is shown in balance sheet in liabilities side or as a deduction from fixed asset in asset side.
What type of account is the accumulated depreciation account?
It is categorized as a contra account. Essentially, it reduces the amount shown on the balance sheet for Property, Plant & Equipment (PP&E), to account for the depreciation that has accumulated over the years that the company has owned the assets. Generally, most companies show PP&E on their balance sheet as a net amount, meaning: ( Total Book Value of Assets - Accumulated Amortization )
Is depreciation a credit or debit entry?
"Depreciation Expense" is a Debit entry and the counter entry is "accumulated depreciation" on an asset which is a credit entry. Depreciation - DR. Amount X Acc. Depreciation - CR. Amount X
What is the account type for Depreciation expense?
Depreciation is a expense account type as it is used to spread the capital asset to more than one years of business of the entire asset life that;s why it is shown in income statement the reduction of assets in equal portion of amount.
