Marlow Company purchased a point of sale system on January 1 for $6,000. This system has a useful life of 10 years and a salvage value of $700. What would be the depreciation expense for the second year of its useful life using the double-declining- balance method? Multiple Choice $960 $530 $1,060
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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