The estimated amount of depreciation on equipment for the current year is $6,475.Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles. **Assets, Liabilities, Revenue, and Expenses: A Breakdown****Assets**1. **Cash (11)** - Represents the amount of money readily available.2. **Accounts Receivable (12)** - Money owed to the business by its customers.3. **Supplies (13)** - Items on hand that will be used in the business operations.4. **Prepaid Insurance (14)** - Insurance premiums paid in advance.5. **Land (15)** - Real estate owned by the business.6. **Equipment (16)** - Machinery and tools used for business activities.7. **Accumulated Depreciation-Equipment (17)** - Total depreciation on equipment, representing its loss of value over time.**Liabilities**1. **Accounts Payable (21)** - Amounts the business owes to suppliers.2. **Unearned Fees (22)** - Money received for services not yet provided.3. **Salaries Payable (23)** - Salaries that are owed but not yet paid.4. **Taxes Payable (24)** - Taxes owed to the government.**Revenue**1. **Fees Earned (41)** - Income received from services provided.**Expenses**1. **Advertising Expense (51)** - Costs incurred for promoting the business.2. **Insurance Expense (52)** - Payments for insurance policies.3. **Rent Expense (53)** - Cost of renting property or equipment.4. **Salary Expense (54)** - Payments made to employees.5. **Supplies Expense (55)** - Cost of supplies used during a period.6. **Utilities Expense (56)** - Payments for water, electricity, and other utilities.7. **Depreciation Expense (57)** - Allocation of the cost of tangible assets over its useful life.8. **Miscellaneous Expense (59)** - Any other expenses not categorized above.This list gives an overview of the basic financial elements within a business, categorized into assets, liabilities, revenue, and expenses to help in understanding the company's financial health and operations.

Name: The estimated amount of depreciation on equipment for the current year
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Description: The estimated amount of depreciation on equipment for the current year is $6,475.Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles. **Assets, Liabilities, Revenue, and Expens

Introduction Depreciation: Depreciation is the decrease in the value of fixed asset. Fixed asset…

Business

Accounting

The estimated amount of depreciation on equipment for the current year is $6,475. Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.

The estimated amount of depreciation on equipment for the current year is $6,475. Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Topic Video

Question

The estimated amount of depreciation on equipment for the current year is $6,475.

Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.

**Assets, Liabilities, Revenue, and Expenses: A Breakdown**

**Assets**

1. **Cash (11)** - Represents the amount of money readily available.
2. **Accounts Receivable (12)** - Money owed to the business by its customers.
3. **Supplies (13)** - Items on hand that will be used in the business operations.
4. **Prepaid Insurance (14)** - Insurance premiums paid in advance.
5. **Land (15)** - Real estate owned by the business.
6. **Equipment (16)** - Machinery and tools used for business activities.
7. **Accumulated Depreciation-Equipment (17)** - Total depreciation on equipment, representing its loss of value over time.

**Liabilities**

1. **Accounts Payable (21)** - Amounts the business owes to suppliers.
2. **Unearned Fees (22)** - Money received for services not yet provided.
3. **Salaries Payable (23)** - Salaries that are owed but not yet paid.
4. **Taxes Payable (24)** - Taxes owed to the government.

**Revenue**

1. **Fees Earned (41)** - Income received from services provided.

**Expenses**

1. **Advertising Expense (51)** - Costs incurred for promoting the business.
2. **Insurance Expense (52)** - Payments for insurance policies.
3. **Rent Expense (53)** - Cost of renting property or equipment.
4. **Salary Expense (54)** - Payments made to employees.
5. **Supplies Expense (55)** - Cost of supplies used during a period.
6. **Utilities Expense (56)** - Payments for water, electricity, and other utilities.
7. **Depreciation Expense (57)** - Allocation of the cost of tangible assets over its useful life.
8. **Miscellaneous Expense (59)** - Any other expenses not categorized above.

This list gives an overview of the basic financial elements within a business, categorized into assets, liabilities, revenue, and expenses to help in understanding the company's financial health and operations.

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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