Unearned rent income was not recognized in year 2021. What is its effect liability at December 31, 2022. 2. Depreciation is understated in year 2021. What is its effect in net income of 2022? 3. Depreciation is understated in year 2021. What is its effect in carrying value of the asset as at 12/31/2022? Choices a. Cannot be determined b. Understated c. Overstated d. No effect
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.
1. Unearned rent income was not recognized in year 2021. What is its effect liability at December 31, 2022.
2.
3. Depreciation is understated in year 2021. What is its effect in carrying value of the asset as at 12/31/2022?
Choices
a. Cannot be determined
b. Understated
c. Overstated
d. No effect
Step by step
Solved in 2 steps
