Depreciation is computed using the straight-line method. Equipment purchased on November 1, 20X1, for $7,920 has an estimated useful life of 6 years with no salvage value. Record the adjustment on November 30, 20X1.

Q: OCF analysis

A: Operating Cashflow Analysis  = Net Income + Depreciation and Amortization- Net Working capital

Q: Describe about the LIFO and FIFO method.

A:

Q: Define value chain.

A: Value Chain: Value Chain is the combination of activities including all the costs to do such…

Q: Describe the functions and powers of ASIC

A: Australian securities and investment commission is a commission made in 1998 of Australian…

Q: Describe WACC and its components.

A: WACC: The weighted average cost of capital (WACC) is a computation of   cost of capitalof a company…

Q: Explain NAREIT Index?

A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…

Q: What is data mining?

A:

Q: Define NRV method.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Explain an example of internal users.

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: Define value drivers

A: Introduction: Value drivers are related to concept of free cash flow valuation model. This helps the…

Q: What is information overload?

A: Report: The formal document used for providing information to the managers is called report. The…

Q: What is the client-server model?

A: Client Server model: A client-server model can be defined as the architecture of distributed…

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.