Accumulated Depreciation

Accumulated depreciation is the amount identified on the balance sheet as an offset account against the corresponding fixed assets. Accumulated depreciation is the lifetime accumulated amount taken as a deduction on the income statement (profit and loss).

Bookkeeping – Estimating Depreciation (Lesson 83)

Estimating Depreciation

Depreciation is a form of an allowance for the wear and tear (exhaustion) of property used in a trade or a commercial enterprise.   The idea is to match as well as possible the actual use (utility) of the asset  to its change or reduction in fair market value due to that utility.

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Bookkeeping – Depreciation Schedules (Lesson 51)

Depreciation Schedules

When a small business purchases fixed assets two financially based opposing forces come into play.  The first is the financial reporting desire to present information in a fair manner so management can make good financial decisions.  The opposing force has to do with taxation.  Here the business desires to report less profit to reduce the tax obligation.

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Bookkeeping – Proper Balance Sheet Presentation (Lesson 20)

Balance Sheet Presentation

The balance sheet serves as an historical report.  It identifies the accumulated change in value since inception.  The balance sheet is organized into two halves and both sides must be equal in value.  In addition, the balance sheet is a snapshot of the financial condition at a single moment in time along the lifetime timeline of the company.

Tangible and Intangible – Business Definitions and Use

Tangible and Intangible Meaning

Tangible and intangible are terms with several different meanings.  A lot of well educated folks have a difficult time providing an all inclusive definition.  Someone once described tangible as ‘something that can be burned’.  Well, land is tangible and yet, you can’t burn it.

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