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Bookkeeping All-in-One For Dummies, 2nd Edition
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Bookkeeping All-in-One For Dummies, 2nd Edition

by Lita Epstein, John A. Tracy
August 2019
Intermediate to advanced content levelIntermediate to advanced
608 pages
15h 28m
English
For Dummies
Content preview from Bookkeeping All-in-One For Dummies, 2nd Edition

Chapter 1

Depreciating Your Assets

IN THIS CHAPTER

Bullet Understanding depreciation and why you do it

Bullet Exploring depreciation methods

Bullet Looking at depreciation’s tax impact

Bullet Pulling together depreciation schedules

Bullet Entering depreciation expenses in the books

All businesses use equipment, furnishings, and vehicles that last more than a year. Any asset that has a lifespan of more than a year is called a fixed asset. Fixed assets may last longer than other assets, but even fixed assets eventually get old and need replacing.

Because your business should match its expenses with its revenue, you don’t want to write off the full expense of a fixed asset in one year. After all, you’ll certainly be making use of the asset for more than one year.

Imagine how bad your income statement would look if you wrote off the cost of a $100,000 piece of equipment in just one year. It would look as if your business wasn’t doing well. Imagine the impact on a small business; $100,000 would eat up its entire profit ...

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Publisher Resources

ISBN: 9781119592907Purchase book