The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2014.(b) Indicate the account title to which each expenditure should be debited. 1.   Paid $7,000 of accrued taxes at the time the plant site was acquired.   choose an account title  Land ImprovementsLandLicense ExpenseEquipmentPrepaid Insurance 2.   Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.   choose an account title  LandLand ImprovementsPrepaid InsuranceEquipmentLicense Expense 3.   Paid $850 sales taxes on a new delivery truck.   choose an account title  LandLand ImprovementsPrepaid InsuranceLicense ExpenseEquipment 4.   Paid $21,000 for parking lots and driveways on the new plant site.   choose an account title  EquipmentLicense ExpenseLand ImprovementsLandPrepaid Insurance 5.   Paid $250 to have the company name and slogan painted on the new delivery truck.   choose an account title  LandEquipmentLicense ExpensePrepaid InsuranceLand Improvements 6.   Paid $8,000 for installation of new factory machinery.   choose an account title  License ExpenseLandEquipmentLand ImprovementsPrepaid Insurance 7.   Paid $900 for a 1-year accident insurance policy on the new delivery truck.   choose an account title  LandPrepaid InsuranceEquipmentLand ImprovementsLicense Expense 8.   Paid $75 motor vehicle license fee on the new truck.

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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.