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Depreciation is not a liability rather it is an expense and it is that part of full cost of fixed asset upto which company has utilized that asset in revenue generation in one specific fiscal year and as benefit is already taken and cash already paid it is expense rather then liability which deals with future.
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Is depreciation expense an asset or liability?
Depreciation expense is neither an asset or liability. It is an expense.
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.
What are the basic method of depreciation?
http://en.wikipedia.org/wiki/Depreciation#Straight-line_depreciation
What is the normal balance of accumulated depreciation?
the normal balance of accumulated depreciation is "credit"
Is depreciation expenses a non-cash expense?
is depreciation expense a non-cash expense
Is depreciation expense an asset or liability?
Depreciation expense is neither an asset or liability. It is an expense.
Is provision for depreciation is current liability?
NO, it is not a liability it is a con-tra account
Where does the accumulated depreciation appear on?
Accumulated Depreciation is a liability nature of account to reduce the contra asset from balance sheet that's why it only shows in liability side of balance sheet to show reduction of asset.
If the accumulated depreciation account normally has a credit balance is it a liability?
false.
Accumulate depreciation accounts are liability accounts?
FALSE, It's a contra-asset
Where does reserve for depreciation go on the balance sheet?
accumulated depreciations are recorded in the liability side of the balance sheet as a deduction from concerned assets. it also shows in the debit side of profit and loss account as an expence
Is accumalted depreciation a liability?
No, even though accumulated depreciation has a credit balance, it is shown under assets. Accumulated depreciation is a contra T-account to a fixed tangible asset. For example, "Accumulated depreciation machines" is a contra T-account to "Machines". Contra T-accounts are presented together with the T-account they are connected with. Therefore, accumulated depreciation is shown on the debit side with assets. As it has a credit balance, the balance is subtracted. (The sign of a T-account 'flips' when the T-account is included on the opposite side on the balance sheet.)
What is the use of depreciation?
Depreciation is the distribution of cost of asset over its useful life. It is calculated as depreciation is allowed as deduction from the income of entity while calculating its tax liability. The above answer is given in respect of Indian Accounting Standards.
Is Depreciation on plant and machinery asset or liability?
surely it is neither, it is merely just a reduction in marketable value and no money is paid or received with depreciation. it does not affect cash but is classed as an expense.
The accounting procedure that accounts for most of the deferred income tax liability for most companies is?
depreciation expense
Is accumulated depreciation a revenue on a single step income statement?
accumulated depreciation shows the total amount of depreciation charged so it is a contra entry for fixed asset and shown in liability side or in asset side but as a deduction from fixed asset and not in income statement.
Is depreciation is an asset liability or equity?
no Depreciation Expense is an expense on your Statement of Comprehensive Income (Profit and Loss Account) The depreciation expense in the year would then reduce the value of the asset to which the depreciation relates. If you have any further questions on this topic, please do not hesitate to contact me at info@hodgsons.co.uk -------------------------------------------- With Regards to the Accounting Equation. Equity (NAV)= Assets- Liabilities Depreciation would be considered negative equity (as are all expenses) as they represent a decrease in the net asset value- or NAV- (not through transaction with the entities owner)
