Accrual-based accounting requires a business to match the expenses it incurs with the revenues it generates each accounting period. Because a long-term asset, such as a piece of equipment, contributes ...

Assets like equipment, vehicles and furniture lose value as they age. Parts wear out and pieces break, eventually requiring repair or replacement. Depreciation helps companies account for the ...

Accumulated depreciation is the sum of an asset’s depreciation expense. It’s calculated from the start of its use to a specific date. It’s also a contra-asset account. That means it decreases the ...

A business wants to deduct expenses against revenues in the most effective fashion possible. But being effective doesn't mean that you always deduct an expense immediately. Depreciation allocates the ...

When a business acquires an asset to be used in its operations, the cost of the asset is generally not expensed all at once. Rather, the cost is depreciated over a period of time that depends on the ...

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When depreciating an asset, companies need to consider either a straight-line or accelerated schedule. When choosing the latter, the double-declining balance mode of depreciation is among the most ...

Depreciation determines the loss of value of an asset over its useful life. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take ...

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