Depreciation.
Fixed assets to total assets ratio describe about the percentage or number of time fixed assets are of total assets. It helps the management to find out that either they are maintaining proper fixed assets and current assets ratio or there may be any changes required in the ratio which is to be maintained because if they maintain high ratio it will affect the depreciation expense and ultimately net income as well.
It is treated as expense because it uses to allocate the related assets cost portion to profit and loss account due to usage of fixed assets for revenue generation in fiscal year.
Fixed
Main reason for prodiving depreciation is to allocate the part of cost of fixed assets to specific fiscal year to income statement as expense in which year fixed asset is used to generate revenue for business.
fixed assets
depreciation of fixed assets reduces the profit as depreciation is also an expense.
If repair improves the performance of fixed assets and massive improvement then it is part of fixed assets otherwise revenue expense.
fixed assets
Depreciation expense represents the (systematic) decline in value of fixed tangible assets. The income statement (or P&L) shows the revenues and expenses of a company, including depreciation expense.
Depreciation is the method of allocation of part of cost to all fiscal years to which fixed asset is used for revenue generation to income statement
Debit Depreciation Expense Credit Accumulated Depreciation
depreciation expense
Fixed assets to total assets ratio describe about the percentage or number of time fixed assets are of total assets. It helps the management to find out that either they are maintaining proper fixed assets and current assets ratio or there may be any changes required in the ratio which is to be maintained because if they maintain high ratio it will affect the depreciation expense and ultimately net income as well.
Fixed assets to total assets ratio describe about the percentage or number of time fixed assets are of total assets. It helps the management to find out that either they are maintaining proper fixed assets and current assets ratio or there may be any changes required in the ratio which is to be maintained because if they maintain high ratio it will affect the depreciation expense and ultimately net income as well.
It is treated as expense because it uses to allocate the related assets cost portion to profit and loss account due to usage of fixed assets for revenue generation in fiscal year.
Fixed
Operating Expenses are the cost of doing business and are paid out of the company's cash or in some cases paid with Bonds, Stocks, or Dividends, either way, these expense will affect the Cash of the company and it's worth. Their are two accounts for Depreciation one is Accumulated Depreciation. This is an Contra-Asset Account and is listed on the Balance Sheet under assets and is deducted from the related asset account. Depreciation Expense is the expense we claim from Accumulated Depreciation and though it is an expense it does not affect our Cash. We do not actually "pay" this expense. Depreciation is the decline in usefulness of a Fixed Asset. Remember, all Fixed Assets (except Land) lose their usefulness. Decreases in the usefulness of assets that are used in generating revenue are recorded as expenses. However, such decreases for fixed assets are difficult to measure. For this reason, a portion of the cost of the fixed asset is recorded as an expense each year for its useful life.