Bookkeeping – Introduction to Depreciation (Lesson 50)

Depreciation

Depreciation is the process of allocating the initial capital outlay for fixed asset purchases over time to the income statement.  The basic principle is that any fixed asset has a predetermined lifetime based on time, usage or fair market value.  Your job as the bookkeeper is to assign depreciation expense to the respective asset and record the entry as a function of daily operations.

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