Question

Identify and describe your business (e.g. Clothing Store, Landscaping business, Delivery service, or Restaurant).

Provide two examples of long-term assets that the business owns.

Classify the asset (i.e. building, equipment, furniture & fixtures, etc.)

What depreciation method will you use to depreciate this asset? Explain Why.

How does depreciation affect the income statement and balance sheet?

Explain how depreciation might affect your decisions to purchase expensive equipment or real estate.

Support your content with at least one credible source. Please note Wikipedia is not a credible source. Cite your sources

Answer 1

Two examples of long-term assets Land & Building Plant & Machinery.

Fixed Asset -Land Bulidings Equipments Furniture &Fixture

Current Asset Inventory of raw material & Trade Debtors

2) Straight line method is used method for calculating depreciation under generally accepted accounting principles, or GAAP, is the straight line method. This method is the simplest to calculate, results in fewer errors, stays the most consistent and transitions well from company-prepared statements to tax returns.

3) Depreciation is charged from P & L account asan provision for fixed asset tillits usefullife . Depreciationis reduced from value of fixed asset