See sum of the years’ digits method of depreciation.
See sum of the years’ digits method of depreciation.
How do I calculate depreciation using the sum of the years' digits? Author: Harold Averkamp, CPA, MBA Definition of the Sum-of-the-Years’-Digits Depreciation The sum-of-the-years’-digits depreciation (SYD...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
See sum-of-the-years’ digits method of depreciation.
Depreciation Quiz and Test | AccountingCoach Depreciation(Practice Quiz) Download PDF Author: Harold Averkamp, CPA, MBA For multiple-choice and true/false questions, simply press or click on what you think is the correct...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
Depreciation Author: Harold Averkamp, CPA, MBA 89 Q&A Popular Recent What is the double declining balance method of depreciation? What is a journal entry? What entry is made when selling a fixed asset? What is...
Adjusting Entries Author: Harold Averkamp, CPA, MBA 134 Q&A Popular Recent What is the accrual basis of accounting? What are accruals? What is the double declining balance method of depreciation? What is a trial balance?...
A form of accelerated depreciation which means that in the early years of an asset’s life there is more depreciation expense than under the straight-line method. However, in the later years of the asset’s...
Kindly illustrate various depreciation methods. Author: Harold Averkamp, CPA, MBA Definition of Depreciation Depreciation is the systematic allocation of the cost of an asset to Depreciation Expenses over the asset’s...
What is accelerated depreciation? Author: Harold Averkamp, CPA, MBA Definition of Accelerated Depreciation Accelerated depreciation is the allocation of a plant asset‘s cost at a faster rate than straight-line...
What is depreciation expense? Author: Harold Averkamp, CPA, MBA Definition of Depreciation Expense Depreciation expense is the appropriate portion of a company’s fixed asset’s cost that is being used up during the...
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
Does a company have to use the IRS years of useful life for depreciation? Author: Harold Averkamp, CPA, MBA For the company’s financial statements, the economic life of the asset should be used—not the years of...
The systematic allocation of the cost of an asset from the balance sheet to Depreciation Expense on the income statement over the useful life of the asset. (The depreciation journal entry includes a debit to Depreciation...
The depreciation computed for financial reporting purposes—as opposed to income tax depreciation. To learn more, see Explanation of Depreciation.
The contra asset account which accumulates the amount of Depreciation Expense taken on Equipment since the equipment was acquired. As a contra asset account it will have a credit balance.
The income statement account which contains a portion of the cost of equipment that is being expensed during the time interval shown in the heading of the income statement.
The amount of a long-term asset’s cost that has been allocated to Depreciation Expense since the time that the asset was acquired. Accumulated Depreciation is a long-term contra asset account (an asset account with...
What is depreciation? Author: Harold Averkamp, CPA, MBA Definition of Depreciation In accounting, depreciation is the assigning or allocating of the cost of a plant asset (other than land) to expense in the accounting...
See accelerated depreciation.
The depreciation computed on the tax return according to the income tax code and regulations. This amount is usually different from the depreciation used on the financial statements (book depreciation).
Usually a change in the estimated useful life of an asset or a change in the estimated salvage value. The change usually causes a change in the depreciation expense for the current year and subsequent years. The...
What is the purpose of depreciation? Author: Harold Averkamp, CPA, MBA Purpose of Depreciation The purpose of depreciation is to achieve the matching principle of accounting. That is, a company is attempting to match the...
What are the effects of depreciation? Author: Harold Averkamp, CPA, MBA Definition of Depreciation Depreciation is the systematic allocation of the cost of a company’s assets used in its business from the balance sheet...
To learn more, see Explanation of Depreciation.
Is depreciation a source of funds? Author: Harold Averkamp, CPA, MBA Definition of Depreciation Depreciation is the systematic allocation of the cost of a business asset to expense over the useful life of the asset. The...
The allocation of the cost of a plant asset to expense in an accelerated manner. This means that the amount of depreciation in the earlier years of an asset’s life is greater than the straight-line amount, but will...
Is depreciation a temporary account? Author: Harold Averkamp, CPA, MBA Definition of Depreciation Accounts There are two types of general ledger accounts in which depreciation is recorded: Depreciation Expense which is a...
This is a contra long-term asset account which is credited for the depreciation associated with Buildings. Since it is a balance sheet account, the accumulated depreciation account balance does not close at the end of...
Is depreciation an operating expense? Author: Harold Averkamp, CPA, MBA Depreciation Could Be Either an Operating Expense or a Non-operating Expense Depreciation is an operating expense if the asset being depreciated is...
See straight-line method of depreciation.
The depreciation used on a company’s income tax return. Usually this is different from the depreciation used on the financial statements.
Our Explanation of Depreciation emphasizes what the depreciation amounts on the income statement and balance sheet represent. Learn why depreciation is an estimated expense that does not assist in determining the current...
What is accumulated depreciation? Author: Harold Averkamp, CPA, MBA Definition of Accumulated Depreciation Accumulated depreciation is the total amount of a plant asset’s cost that has been allocated to depreciation...
The income statement account which contains a portion of the cost of plant and equipment that is being matched to the time interval shown in the heading of the income statement. (There is no depreciation expense for...
What is the difference between depreciation expense and accumulated depreciation? Author: Harold Averkamp, CPA, MBA Definition of Depreciation Expense Depreciation expense is the amount of depreciation that is reported...
Featured Review
"AccountingCoach PRO - a great learning experience at a very low cost. I would like to thank Harold Averkamp and all the staff behind it for preparing course material that contains all the essentials for a successful career in the accounting field and for giving lifetime access to the materials. The materials are very easy to follow. I am particularly impressed with your ability to explain so beautifully the accounting concepts and debits and credits. I feel that even a beginner can understand them easily. All my interactions have been great! I recommend this excellent accounting course to all." - Valsa G.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: