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Depreciation is a process of allocating fixed asset cost portion to specific single fiscal year in which that asset is used to generate revenue.

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10y ago

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Which accounting principle directs the depreciation process?

Which accounting principle directs the depreciation process?


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.


Accumulated depreciation and depreciation expense?

Using accumulated depreciation and depreciation expense is a way that businesses can realize the true value of assets. A piece of equipment, for example, is devalued every year by the process of amortizing the asset. This in turn is recorded as depreciation and depreciation expense.


Depreciation is a process that results in?

the loss of value in an item


Is the depreciation expense added to net income?

Be Careful depreciation is an accounting function but when booked on the P&L it better be going to a depreciation "Sweep Account". Otherwise you are booking depreciation as paper money only! And four or five years down the road you will have nothing to show for it.


Does the Depreciation measure the actual decline in market value of an asset?

No. Depreciation is the process of allocating to expense the cost of a plant asset.


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.


The process of allocating the cost of plant assets to expense over their useful lives is called-?

Depreciation


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 account for depreciation in your financial statements?

Depreciation is the process of allocating the cost of a tangible asset over its useful life. In financial statements, depreciation is recorded as an expense, reducing the asset's value on the balance sheet. This helps reflect the true value of the asset as it is used over time.


What is the entry for accumulated depreciation?

Debit depreciation accountCredit accumulated depreciation