Accountıng I Deneme Sınavı Sorusu #1313687
What is the meaning of depreciation in accounting?
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Value and usefulness of some assets will increase their value when the business uses them in its operations. |
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Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes. |
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Businesses depreciate short-term assets for both tax and accounting purposes. |
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Businesses depreciate short-term liabilities for both tax and accounting purposes. |
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Depreciation is the systematic allocation of the expected amount of an asset and liabilities over its residual life. |
Value and usefulness of plant assets will decline when the business uses them in its operations. The decline in usefulness of a plant asset is an expense which is called as a expense. Here the concept of depreciation emerges. Depreciable amount is the cost of an asset minus its residual value, and depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. In other words, depreciation is a cost allocation process over the plant asset’s useful life.
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