Prepare the depreciation schedule, using the declining-balance method (twice the straight-line rate). Note: Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Chevrolet Colorado. Residual value Estimated life End of year 1 End of year 2 End of year 3 End of year 4 Cost of Chevy truck $ 25,500 $ 5,100 5 years Accumulated depreciation at beginning of year Book value at beginning of year Depreciation expense for year Accumulated depreciation at end of year Book value at end of year

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Q: Distinguish between assets and liabilities.

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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.