Mazaya Company purchased a new van for floral deliveries on January 1, 2011. The van cost R.O.40,000 with an estimated life of s years and RO10,000 residual value at the end of its useful life The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of z011?
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.
Mazaya Company purchased a new van for floral deliveries on January 1, 2011. The van cost R.O.40,000 with an estimated life of s years and RO10,000 residual value at the end of its useful life The double-declining-balance method of
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