Question

Depreciation is a(n) & rational allocation of the cos of an asset over its depreciable life.

Depreciation is a(n) & rational allocation of the cos of an asset over its depreciable life.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Yes.As we purchase a fixed assets having usefull life of more than one year and it involves a huge amount of acquisition cost .If we recognise full expenditure in the year of purchase of asset it will lead understatement of profit for purchasing year .and in upcoming years in which that asset will be used having no expense therefore in future years it will lead to overstatement of profit.

Depreciation is an systematic and rational allocation of cost of assets over it's useful life .We have to provide depreciation for accounting as well as for tax purposes.

Hence the above given statement is correct.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Depreciation is the allocation of the cost of fixed assets/investments over its economic life to the...
Depreciation is the allocation of the cost of fixed assets/investments over its economic life to the business. How can depreciation also be the recovery of capital invested?
9. Using straight line depreciation instead of accelerated depreciation over the same depreciable life will _________...
9. Using straight line depreciation instead of accelerated depreciation over the same depreciable life will _________ the Net Present Value of a capital budgeting project a. increase b. decrease c. have no effect upon
Peavey Enterprises purchased a depreciable asset for $24,000 on April 1, Year 1. The asset will...
Peavey Enterprises purchased a depreciable asset for $24,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,400, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? $4,500 $5,400 $18,000 $14,850 $21,600
A depreciable asset is purchased for $50,000. The expected salvage value is zero at the end...
A depreciable asset is purchased for $50,000. The expected salvage value is zero at the end of it’s 8 year useful life. Compute the depreciation schedule by using double declining balance (DDB) to switch over straight line depreciation. Also, determine the book value of the asset after 6 years.
A depreciable asset with a three-year life has a first cost of $30,000 with a $6,000...
A depreciable asset with a three-year life has a first cost of $30,000 with a $6,000 salvage value. The machine's operating cost is $10,000 in year one, $12,000 in year two and $14,000 in year three. According to the straight line method, the depreciation charge in year 2 is closest to: A. $8,000 B. $10,000 C. $20,000 D. $22,000
Asset C3PO has a depreciable base of $24.75 million and a service life of 10 years....
Asset C3PO has a depreciable base of $24.75 million and a service life of 10 years. What would the accumulated depreciation be at the end of year five under the sum-of-the-years' digits method? (Do not round intermediate calculations.) $6.75 million. None of these answer choices are correct. $12.38 million. $18.00 million.
Vaughn Manufacturing purchased a depreciable asset for $572000. The estimated salvage value is $27000, and the...
Vaughn Manufacturing purchased a depreciable asset for $572000. The estimated salvage value is $27000, and the estimated useful life is 10000 hours. Carson used the asset for 1300 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset in the current year? $545000 $54500 $70850 $77870
Colvin Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000....
Colvin Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset’s depreciation expense in Year 2 will be: A) 90000 B) 54000 C) 42000 D) 16000 E) 36000
calculation of Book Value On June 1,20--, a depreciable asset was acquired for $5,520. The asset...
calculation of Book Value On June 1,20--, a depreciable asset was acquired for $5,520. The asset has an estimated useful life if five years (60 month's) and no salvage value. Using the straight line depreciation method, calculate the book value as of Dec 31, 20--. If necessary, round your anssea to two decimal places.
A company purchase an asset wiht 5- year depreciable life for 75,000 with no expected salvage...
A company purchase an asset wiht 5- year depreciable life for 75,000 with no expected salvage value. The company uses straight line depreciation for financial statement and uses double-declining for tax accounting. Assume a tax rate of 34% What is the value of the company's deferred tax account at the end of the second year? Correct Answer: 6120 Can you show me how to solve this problem?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT