Adjusted Trial Balance January 31, 2019 Accounts Cash Office Supples Prepaid Rent Equipment Accumulated Depreciation--Equipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Maggie Graph, Capital Maggie Graph, Drawing Service Revenue Salaries Expense Rent Expense Supplies Expense Depreciation Expense--Equipment Utilities Expense Debits Credits 16,050 1,890 900 50,360 910 7,350 4,390 260 4,400 5,250 37,860 17,510 4,150 1,500 160 400 700 Total 77,020 77,020
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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