ACC 201 WORKSHOP FIVE DEPRECIATION METHODS HANDOUT FOR 5.3 DROPBOX
Download Depreciation Methods Handout for 5.3 Dropbox Review the questions below. As you watch the video Depreciation Methods, take notes and answer the following questions for Dropbox submission:
Question 1. What is the adjustment called that creates an expense for the use of a fixed asset? 2. When depreciation expense is recorded, what account gets credited? 3.
What type of account is the accumulated depreciation account?
4. If depreciation is not recorded, what is the effect on the owner’s equity account?
5.
What is the difference between tangible and intangible assets?
6. What is the difference between the historical cost of an asset and the accumulated depreciation to date? 7. What determines the amount of depreciation charged each year using straight-line methods? 8. If a plastic molding machine is estimated to last
Question for a certain number of production cycles, what method of depreciation might be appropriate for the machine? 9.
If a company chooses to use accelerated depreciation rather than straight-line, what is the effect on income in year 1 of an asset’s life? 10. What justifies applying more depreciation to an asset early in its life?