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Balance Day Adjustments

Balance Day Adjustments. What is a Balance Day. What is Depreciation. Depreciation is specifically defined as the systematic allocation of the depreciable amount of an asset over its useful life. Remember. Important notes. Methods and when to use. Straight line Method. Depreciation:

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Balance Day Adjustments

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  1. Balance Day Adjustments

  2. What is a Balance Day

  3. What is Depreciation Depreciation is specifically defined as the systematic allocation of the depreciable amount of an asset over its useful life.

  4. Remember

  5. Important notes

  6. Methods and when to use

  7. Straight line Method Depreciation: Cost – Salvage valueUseful life of the asset

  8. Diminishing value Is used when assets wear out quickly or are likely to contribute more to revenue in the earlier years of their useful life

  9. Units of use method Is used when an assets life can be readily measured in units, for example hours, kilometres, and the asset’s use may vary from period to period

  10. Units of Use method Depreciation : (Cost – Residual Value) X Usage in the year Estimated total usage

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