When the owner of a business or a reader of financial statements understands the concept of depreciation, he can better evaluate the business operation. Depreciation is merely matching a long life asset to its contribution to the product production or deliver of service in incremental costs.
The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’. Ordinary expenses are those costs typically incurred in your industry. So a restaurant would not ordinarily purchase vaccines. And a medical practice would […]