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Depreciation is a valuation process that results in the reporting of fair market value of an asset?
Wiki User
∙ 9y ago
True. Specifically devaluation is the loss of value of any given property, asset or capital. Accurate management of depreciation can often be deducted on taxes reduces an institutions liabilities.
Wiki User
∙ 9y ago
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Depreciation is a process that results in?
the loss of value in an item
What are principle accounting reports involved in financial reporting in general terms what is the purpose of these reports?
The results of the accounting process are the 5 core financial sections: Balance sheet Income statement Statement of changes in equity Statement of cash flows Notes to the financial statements.
What do you debit and credit when recording depreciation expense?
There are two ways to record depreciation. With and without using a contra t-account for accumulated depreciation. Example The company buys a machine for 100,000. The residual value is 0 and the expected economic lifetime is 10 years. Using straight line method this results in a yearly depreciation expense of 10,000. Without a contra t-account Depreciation expense machine debit 10,000; machines credit for 10,000. At the end of (say) the third year, machines has a debit value of 70,000. With a contra t-account Depreciation expense machine debit 10,000; accumulated depreciation machines credit for 10,000. At the end of (say) the third year, machines still has a debit value of 100,000. Accumulated depreciation machines has a credit value of 30,000. Jointly they show the net value (or book value) of 70,000, which is the same as when no contra t-account is used.
What does Ebitda stand for in taxes?
The acronym "EBITDA" stands for "earnings before interest, taxes, depreciation and amortization". It is an equation used by large companies to predict and measure financial results.
What records a decrease in an asset?
A sales refund will reduce income (debit to Sales Returns) and assets (credit to cash).A debit to Depreciation Expense and a credit to Accumulated Depreciation will reduce assets and net income.It means that some transaction decreases assets and liabilities at the same time. For example, payment of accounts payable results in a decrease in cash and a decrease in accounts payable.
Depreciation is a process that results in?
the loss of value in an item
What is the final step of the scientific investigation?
reporting the results
Does unrestricted reporting require an investigation?
Yes. Both restricted and unrestricted reporting require investigations. Its a matter of who knows why and the results of the investigation that changss.
What is the inventory valuation method that results in the lowest taxable income in a period of inflation?
LIFO method
Early reporting of election outcome generally results in?
early reporting of election outcome generally results in preliminary or unofficial results. These results are based on partial vote counts and are subject to change as more votes are counted. It is important to wait for official results from election authorities before drawing any definitive conclusions.
Does unrestricted reporting require an official investigation?
Yes. Both restricted and unrestricted reporting require investigations. Its a matter of who knows why and the results of the investigation that changss.
Why depreciation expenses is referred to as a noncash expenses?
Because we are not incurring any cash when we are providing depreciation on fixed assets. Depreciation results in the reduction of fixed assets but doesn't involve any cash outflow. That is the reason it has to be added back to the net income while calculating cash flow statement.
The process of meiosis never results in the formation of a?
The process of meiosis never results in the formation of a Diploid.
What does depreciation have to do with net income?
The total depreciation for an accounting period is recorded as a depreciation expense on the income statement. This reduces net income, which is also known as the bottom line. Net income equals revenues minus expenses. Higher depreciation expense contributes to higher total expenses, which results in lower net income. Companies with mostly older assets that have been fully depreciated and companies with few long-lived assets benefit from low depreciation expense and higher net income.
What are differences between Straight - Line and Diminishing Balance Methods of charging depreciation?
The straight line method assumes that the useful life of an asset is evenly distributed to its life, so results in a constant depreciation charge per year provided the estimated residual value remains constant over the life of the asset. for example, Asset's value = $100,000 useful life = 10 years residual value = $20,000 depreciation per year = (100,000 - 20,000)/10 = $8000 per year The diminishing balance method assumes that the asset is more useful on the early days and less useful in the later days, so it results in more depreciation charge in the early years and the charge decreases as the asset becomes old. for example, Asset's value = $100,000 residual value = $20,500 depreciation rate = 10% useful life = 15 years depreciation year 1. (100,000 * 10%) = 10,000 depreciation year 2. (100,000 - 10,000 W1) * 10% = 9000 depreciation year 3. (100,000 - 19,000 W2)* 10% = 8100 depreciation year 4. (100,000 - 27,100 W3)* 10% = 7290 W1 = depreciation of year 1 W2 = depreciation of year 1 and year 2 combined W3 = depreciation of year 1, year 2 and year 3 combined
What was the first individual incentive identified by the Treadway Commission?
Individual incentives include falsely reporting results in order to achieve targeted results for bonus or incentive compensation purposes.
What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?
Controlling
