What is the straight line method, Depreciation Expense, accumulation depreciation? What is the umit of activity, depreciation expense and accumulation depreciation for the problem below? October 1, 2020 - purchased a vehicle for $50,000. Its expected salvage value is $700. The estimated useful life is 4 years, and the estimated useful life is 90,000 miles. Oct 1, 2025 - sells the vehicle for $30,000 after driving it for 20,000 miles
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.
What is the
What is the umit of activity, depreciation expense and accumulation depreciation for the problem below?
October 1, 2020 - purchased a vehicle for $50,000. Its expected salvage value is $700. The estimated useful life is 4 years, and the estimated useful life is 90,000 miles.
Oct 1, 2025 - sells the vehicle for $30,000 after driving it for 20,000 miles
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