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Description: Explain what is meant by depreciation. Describe the methods of depreciation and give a numericalfor straight-line method.

Business

Accounting

Explain what is meant by depreciation. Describe the methods of depreciation and give a numerical for straight-line method.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8EB: Using the information from EB7, calculate depreciation using the straight-line method.

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Concept explainers

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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Explain what is meant by depreciation. Describe the methods of depreciation and give a numerical
for straight-line method.

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