Interested to Buy Any Domain ? << Click Here >> for more details...
Explain the Depreciation, objectives for calculating the
depreciation and various method for calculating depreciation
- 1 Answers
- 8792 Views
- I also Faced
- E-Mail Answers
Answer Posted / shubhangi
Depreciation expense is calculated utilizing either a
straight line depreciation method or an accelerated
depreciation method. The straight line method calculates
depreciation by spreading the cost evenly over the life of
the fixed asset. Accelerated depreciation methods such as
declining balance and sum of years digits calculate
depreciation by expensing a large part of the cost at the
beginning of the life of the fixed asset.
What is Depreciation?
Depreciation is defined as an accounting methodology which
allows an organization to spread the cost of a fixed asset
over the expected useful life of that asset. The cost of
the fixed asset immediately comes out of the cash account
of the organization and is entered as an asset for the
organization. At the end of each period of the useful life
of the asset a part of the cost is expensed. This amount is
added to the accumulated depreciation for the asset. The
net value of the asset on the books of the organization is
the asset account less the accumulated depreciation
account.
A fixed asset is considered depreciable if it will wear out
or become obsolete over a period of years. The period of
years is called the life or the useful life of the item.
The life that is assigned to an item will depend on
industry standards, management standards, and governmental
regulations. Generally, depreciable items include
buildings, manufacturing equipment, office equipment, and
vehicles. Land is not considered a depreciable item as it
does not wear out or become obsolete.
Some fixed assets may be expected to have a market value at
the end of their useful life. This expected value is called
the salvage value. Some organizations set this value on a
per asset basis, some use a percentage of the purchase
price, some assume that all assets will have zero salvage
value, and some use a combination of these methods.
Organizations usually set a price at which a fixed asset is
considered depreciable. Any asset purchased at less than
the set price is immediately expensed. This eliminates the
need to track every waste basket, stapler, hammer, wrench,
desk lamp, etc. Some organizations set this as low as
$100.00. Other organizations set it at $10,000.00 or more.
Once this limit has been set it should be adhered to and
should not be reset every year
| Is This Answer Correct ? | 6 Yes | 6 No |
Post New Answer View All Answers
have you ever been involved in an invoice dispute? How did you manage the problem?
Is there Disqualification of Auditor u/s 139 of Companies Act 2013 if the auditor is indebted towards the company to be appointed as an auditor, if amount exceeds more than Rs.1000 as against the provision related to Companies Act, 1956 ?
sir, i want t know, i got a cheque frm sindhu (that amount i gave her as rent advance, she is returning nw) bt the cheque has cancled and bank take cheque return charges so plz give this journal entries.
Define overhead in terms of accounting?
what do you mean byrecoupment of shortworkings in royalty accounts
A manufacturer want to sale his product in Rs 110/ where his manufacturing cost is 100.what will be tax for the product in different way.If he want to sale his product outside the state then what will be the taxation way. I want to know as urgent.Hope you will describe me as brakewise statement with example.
Dear sir/madam, Want to know entry for closing of sundry creditors account on the end of the year when its accounts shows debit balance, Payment made excess. E.g Invoice rcvd : 100000.00 from XYZ company payment Made: 105000.00 Please suggest best entry for the same
What is process of Vendor Reconciliation and which items will be Add and Less from ad per customer books likes step by step 1-Credit Note shown in vendor a/c but not booked in our a/c- Add or Less 2-Debit Note not shown in vendor a/c but booked in our a/c - Add or Less 3-Invoices not booked in our a/c but shown in vendor a/c- Add or Less 4-Payment booked in our books but not shown vendor- Add or Less If our balance is plus or minus rules is same. like 20000, (-20000) Sir, Provide your mobile n for clarify
under which head should be the p & l appropriation a/c should be opened in tally 9? and how to preapare and display it?
explain the relevance of closing stock account in trading a/c when preparing the gross profit?
What is quality discount?????//// pls mail ur answers at my e - mail ID : kamalsodhi24@gmail.com
I WRITE GROUP-4 EXAMINATION.I STADIYING INTERMEDET HOW MANY PARSANTEGE OF GROUP-4 EXAMINETIN
What is finance lease? What are bonus Shares? entry for it. What is Depreciation? What is the Journal Entry? What is DPS? What is minority Interest? where it is shown?
What is departmental accounting? Give an example
Tell me what is project implementation?
