A company discarded a computer system originally purchased for $8,600. the accumulated value for depreciation was $6,600. The company should recognize a (an): $800 loss
What is depreciation?
- In accounting, depreciation refers to a term that refers to two aspects of the same concept.
- First, the actual reduction in the fair value of the asset, such as the annual depreciation charge for plant equipment.
- The monetary value of an asset diminishes over time through use, wear and tear, or obsolescence.
- This reduction is measured as depreciation. explanation: Impairment, H.
- Impairment of assets can also be caused by many other factors, such as: B. Unfavorable market conditions, etc.
- Using the straight-line method of depreciation, the tractor depreciates by $5,000 per year, resulting in an accumulated depreciation of $20,000.
- When the book value equals the original salvage value, it is considered a fully depreciated asset.
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