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What method of authentication requires a smart card and a PIN to provide more secure access to company resources?
two-factore authentication
Which of these is an example of depreciation?
A worker’s truck breaks down more often after 80,000 miles of driving.
Is depriciation a source of funds?
Depreciation is, strictly speaking, not a source of funds: you can not take the value of depreciation and spend it at the store. Rather, depreciation is a contra asset account, i.e., business expense, that is 'added back' in preparing a Sources and Applications of Funds, i.e., Cash Flow Statement, to arrive at a more accurate indicator of cash flowing into and out of the business.
What would the journal entry be if a company incurred an expense?
There may be more than one way to record an expense. The easiest journal to think about is when you've used cash to pay for the expense. In that case, you would debit an expense account and credit cash. But, if you've received the benefit of an expense but have not yet paid for it the debit would still be the expense account but the credit would be a liability account. Of course, there are times when cash flows but no expense is recognized such as investments in property, plant and equipment. After that expenditure is made you would recognize periodic expenses in the form of depreciation. That would be a debit to depreciation expense and a credit to accumulated depreciation.
Machinery sold what is the accumulated depreciation?
All equipment owned by a business should be listed on the corporation's income tax return each year. This page of the report is called the Depreciation Schedule. Each year the taxpayer should report any new equipment purchased and also tell his accountant which items of equipment were sold or disposed of by the owner. The corporation's accountant increases the depreciation each year to offset income and thereby reduce taxes. The depreciation amount taken each year is usually higher than the actual physical depreciation occurring due to weather and use. To determine the accumulated depreciation on a piece of equipment, look at the last tax return available to see what the number is on the Depreciation Schedule. The actual value of the equipment sold will be higher than the Purchase Price New minus the Accumulated Depreciation. A good rule of thumb would be to add back 1/2 of the accumulated depreciation to get a ball-park idea of the fair market value. Better yet - have the equipment appraised by a Certified Machinery & Equipment Appraiser (CMEA). For more information on this subject, go to www.nebbinstitute.org. An interesting and helpful article on farm equipment that discusses depreciation, recaptured depreciation and capital gains tax related to the sale of equipment can be found at www.extension.iastate.edu/Publications/PM1450.pdf. Paul Klinge, CBI, CBC, CSBA The Lincoln Group, Inc. Waverly, Iowa 319-352-0132 Business Transfer Specialists Mergers & Acquisitions Business Valuations Machinery & Equipment Appraisals
Why depreciation is not shown in balance sheet?
depreciation is an estimation and every company estimate there own method's of depreciation which gives more option for fraud . because depreciation is a non cash expense. which can lead to big fraud.
Can a company change the method of providing depreciation?
A company can change its method of providing Depreciation, (a) If it is necessitated by Statue or standard, or (b) If it would result in more Appropriate preparation or presentation of Financial Statement...
Sinking fund method for depreciation?
Sinking fund method for depreciation The straight line method has equal annual depreciation for every year. There are other methods which has more depreciation allocated to the earlier years like Written-Down Value (WDV) method in which depreciation is charged at fixed rate (%) on the reducing balance (i.e. cost less depreciation) every year. The sinking fund method allocates more depreciation to the later years. The depreciation for the first year equals the annual deposit needed for a sinking fund to accumulate at the given rate to an amount that equals the depreciation base. For each consecutive year, the annual depreciation equals the annual sinking fund deposit plus the interest earned on the fund up to that year.
What depreciation method is use least?
The least commonly used depreciation method is the sum-of-the-years'-digits (SYD) method. This method accelerates depreciation more than straight-line but less than double declining balance, making it less appealing for many businesses that prefer simpler or more aggressive methods. Its complexity and the fact that many assets do not experience significant depreciation in earlier years contribute to its infrequent use.
Diminishing balance method of deprecation in the financial statements be more conservative or less conservative than the current practice of using the straight-line method?
The diminishing balance method of depreciation is generally considered less conservative than the straight-line method as it results in higher depreciation expenses in the earlier years of an asset's life. This reflects a more aggressive approach in recognizing depreciation compared to the straight-line method, which spreads depreciation evenly over the useful life of the asset.
What is MODIFIED straight line method for calculating depreciation?
The IRS rules the acceptable depreciation methods to be used by companies, in a way such depreciation may be considered a deductible expense, what ultimately lowers the profit and consequently the tax payable. Political measures to improve economics, lobby etc. may demand additional benefits and raising the IRS acceptable amount of depreciation is one of them. The simplest depreciation method is the straight line, which presumes an evenly depreciation of a fixed asset over the time. The easiest way to modify it comes by accelerating (increasing the amount of deductible) depreciation. That´s what it is. For more details, there is a precise text - weblinked below - that explain most of the latest modifications in the straight line method, despite of too accounting wording. : is there any fixed rule for increasing the rate of depreciation? : it is not clearly mentioned in the link provided
Why is it important for a hospital to pay attention to depreciation more than a computer software company?
It is more important for a hospital to pay attention to depreciation than a computer software company for a couple of reasons. The first reason is patient care. The second reason a hospital needs to pay attention to depreciation is the insurance company payment to the hospital is oftentimes much less than a private pay.
What is the activity method of depreciation?
The activity method of depreciation calculates an asset's depreciation based on its usage or production levels rather than a fixed time period. This method allocates costs based on the actual activity, such as hours used or units produced, providing a more accurate reflection of the asset’s wear and tear. It's particularly useful for assets whose value diminishes in relation to their operational output. This approach ensures that depreciation aligns with the asset's contribution to revenue generation.
What is depreciation in terms of accounts?
Depreciation in accounting refers to the gradual decrease in the value of a tangible asset over time. It is a method of allocating the cost of an asset over its useful life, in order to reflect the wear and tear or obsolescence of the asset as it is used in the business operations.
What is Reducing balance method of depreciation?
This is an accelerated method of depreciation in which the depreciation is computed by applying a fixed rate to the book value of the fixed asset. This method results in a higher depreciation charge in the early life of the asset compared to later years. The rationale for using this method is that many kinds of plant assets are most efficient when new, so they provide better service in the early years of its useful life. It is therefore consistent with the matching rule to allocate more depreciation to the early years compared to later years if the benefits to be received in the early years are higher. E.g. Computers are more useful in the early years compared to later years, since they are easily obsolete by technological advances. Hence, it has diminishing value as the years goes by.
Which method is best for calculating depreciation?
The best method for calculating depreciation depends on the nature of the asset and the business's financial strategy. The straight-line method is commonly preferred for its simplicity and consistency, spreading the asset's cost evenly over its useful life. However, the declining balance method may be advantageous for assets that lose value more quickly, allowing for higher depreciation expenses in the earlier years. Ultimately, the choice should align with financial reporting requirements and tax implications.
What is the depreciation of capital equipment?
Depreciation of capital equipment refers to the gradual reduction in its value over time due to wear and tear, obsolescence, or usage. This accounting method allocates the cost of the equipment over its useful life, reflecting its decreasing value on financial statements. Businesses use various methods, such as straight-line or declining balance, to calculate depreciation, impacting tax liabilities and financial planning. Ultimately, depreciation helps provide a more accurate picture of a company's financial health by accounting for asset value loss.
