Suppose that a truck is purchased by a company at a cost of 150.000 TL for production purposes on 16 June 2019. The straight line depreciation rate is 10%, but the company uses accelerated method of depreciation. What would be the amount allocated to the "Idle Time Expenses and Losses" account on 30 June 2019?
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.
Suppose that a truck is purchased by a company at a cost of 150.000 TL for production purposes on 16 June 2019. The straight line
account on 30 June 2019? a) 12.500 b) 12.750 c) 13.500 d) 13.750
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