What do you mean by depreciation, Financial Accounting

Q. What do you mean by depreciation? What are the causes for depreciation? Explain the two methods of depreciation.

Depreciation means a fall in the quality, quantity or value of the asset. It is defined as the determination in the cost of an asset during a particular period due to wear and tear and obsolescence. It is the allocation of the cost of capital expenditure to the periods of its use. It is used to describe the decrease in book value of an asset. It is considered an expense and is listed in an income statement under expenses. Causes for Depreciation: -Wear and Tear -Efflux of time -Obsolescence -Accident -Fall in market price Methods of depreciation 1.Straight line depreciation  2. Reducing balance method

Posted Date: 8/14/2013 3:28:18 AM | Location : United States







Related Discussions:- What do you mean by depreciation, Assignment Help, Ask Question on What do you mean by depreciation, Get Answer, Expert's Help, What do you mean by depreciation Discussions

Write discussion on What do you mean by depreciation
Your posts are moderated
Related Questions
Stark Company has five employees. Employees paid by the hour receive a $10 per hour pay rate for the regular 40-hour work week plus one and one-half times the hourly rate for each

Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporat

Distribution to a beneficiary Before distribution to a beneficiary, the investments will be re-valued and the profits or losses divided between the beneficiaries as follows:-

Q. What do you mean by Bankruptcy? Bankruptcy - Legal process, governed by federal statute, whereby the DEBTS of an insolventperson are liquidated after being satisfied to the

Prepare a master budget You have just been hired as a new management trainee by XYZ Limited, a distributor of earrings to various retail outlets located in shopping malls acro

Balance Sheets: contains the balance sheets as of December 31, 2010, 2009, and 2008. Accounting practice and tradition dictates that the most current year is placed nearest to the

After going through this section, you must be capable to: -          Identify the time value of money; -          Know what gives money its time value; -          Identify

1.Which of the following is true? A. Land is depreciated using the straight line depreciation method B. Land is amortized using the declining balance method C. Land is depleted usi

The enhancing qualitative characteristic of understand ability means that information should be understood by a those who are experts int eh interpretation of financial information

a) A company has 7000 obsolete toys carried in inventory at a manufacturing cost of $6 per unit. If the toys are reworked for $2 per unit, they could be sold for $3 per unit. If th