The current value or carrying value of Lance Engineering “cement mixer” was 2,550 in 2020. The company conducted a revaluation exercise in 2022. The carrying value of “the cement mixer was estimated to be $1000. The value of the “cement mixer” is deemed to be impaired. Select one: True False Irie Company prepares financial statements on a quarterly basis. The final set of financial statements prepared at the end of the financial year are presented to the auditor annually. The quarterly reports are referred to as Interim Financial Reports. Select one: True False The XR Company’s Financial Year Ended on December 31, 2021. However, before the completion of the audit in February 2023 it was determined the company lost a case that was at court before the end of the financial year, but the outcome was uncertain. The auditor will disclosed this information as: a. An annual expense b. An unusual occurrence c. A tax liability for the company d. A subsequent event.
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.
The current value or carrying value of Lance Engineering “cement mixer” was 2,550 in 2020. The company conducted a revaluation exercise in 2022. The carrying value of “the cement mixer was estimated to be $1000. The value of the “cement mixer” is deemed to be impaired.
Irie Company prepares financial statements on a quarterly basis. The final set of financial statements prepared at the end of the financial year are presented to the auditor annually. The quarterly reports are referred to as Interim Financial Reports.
The XR Company’s Financial Year Ended on December 31, 2021. However, before the completion of the audit in February 2023 it was determined the company lost a case that was at court before the end of the financial year, but the outcome was uncertain. The auditor will disclosed this information as:
An annual expense
An unusual occurrence
A tax liability for the company
A subsequent event.
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