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6 December, 16:29

As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called

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  1. 6 December, 18:04
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    Depreciation

    Explanation:

    Depreciation is the systematic allocation of estimated cost to an asset. Methods include straight line, sum of the year digits, double declining etc. The entries for recognizing this cost are;

    Debit depreciation expense

    Credit Accumulated depreciation

    Hence to account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called depreciation.
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