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ANS: i) Physical Causes. Under this classification, we may include-
(a) wear and tear due to use
(b) deterioration and decay with the passage of time, whether used or not
(c) damage and destruction due to an accident like fire, flood, earthquake, mishandling etc
(d) depletion of asset.
(2) Functional Causes. The following causes may be included under functional causes-
(a) uselessness for the present purpose.
(b)Obsolescence i.e., due to innovation, invention, change in technique etc.
Causes of depreciation may also be classified as internal and external. Internal causes are that arising from the operation of any cause natural to or inherent in the asst itself such as wear an there due to use an depletion. External causes are that arising from the operation of forces outside the asset itself, such as obsolescence and efflux of time.
BY ADITYA 2nd SEM
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What event makes the accumulated depreciation account go up Are these debits or credits to accumulated depreciation?
Depreciating assets over time causes the Accumulated Depreciation to go up with a credit entry. The debit is to depreciation expense.
What is the relationship between depreciation and cash flows?
There is a definite link between depreciation and cash flow within the business world. As a non-cash expense, depreciation causes a reduction in cash flow that is reported by a company. This can be viewed on the companyâ??s net income statement.
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.
What is the entry for accumulated depreciation?
Debit depreciation accountCredit accumulated depreciation
What is the difference between depreciation and accumulated depreciation?
Depreciation is for a particular year (say for Year 3). Accumulated depreciation is the aggregate of depreciation from the beginning (say from Year 1 to Year 3)
What event makes the accumulated depreciation account go up Are these debits or credits to accumulated depreciation?
Depreciating assets over time causes the Accumulated Depreciation to go up with a credit entry. The debit is to depreciation expense.
Does depreciation expense result in tax savings?
Yes depreciation expenses causes a reduction in taxes because depreciation is considered as expense which reduces the net profit and due to reduction of net profit tax amount also reduces.
What is the relationship between depreciation and cash flows?
There is a definite link between depreciation and cash flow within the business world. As a non-cash expense, depreciation causes a reduction in cash flow that is reported by a company. This can be viewed on the companyâ??s net income statement.
Effects of final account if depreciation is ommitted?
if depreciation is omitted on final account it will Over state the profit .
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.
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.
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.
What is the entry for accumulated depreciation?
Debit depreciation accountCredit accumulated depreciation
What is the difference between depreciation and accumulated depreciation?
Depreciation is for a particular year (say for Year 3). Accumulated depreciation is the aggregate of depreciation from the beginning (say from Year 1 to Year 3)
What is the journal entry accumulated depreciation?
[Debit] Depreciation account [Credit] Accumulated depreciation
Can you put the word depreciation in a sentence?
Every thing will have depreciation . depreciation is rule of nature.
