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Posts by Caroline Grimm

link to What are the Methods of Calculating Depreciation?

What are the Methods of Calculating Depreciation?

Companies can use several different methods to calculate depreciation on Fixed Assets. The method is chosen at the time the asset is purchased and placed in service. The method generally remains the...

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link to What is the Matching Principle?

What is the Matching Principle?

The Matching Principle is part of Generally Accepted Accounting Principles (GAAP). It requires that revenues and their related expenses be recorded in the same accounting period. As an example,...

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link to How is Class Life or Useful Life Determined for an Asset?

How is Class Life or Useful Life Determined for an Asset?

The Class Life or Useful Life of a fixed asset is the number of years over which an asset can be depreciated. Class life is determined by tax law which defines a specific number of years to each type...

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link to What is a Depreciation Schedule?

What is a Depreciation Schedule?

A Depreciation Schedule is a listing of every Fixed Asset a company owns. It includes the following for each asset: Asset Name (2015 Ford F150, Hobart Mixer, Hyster Forklift)Any identifying...

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link to How to Calculate Sum of the Years Digits Depreciation

How to Calculate Sum of the Years Digits Depreciation

Sum of the Years Digits is an accelerated depreciation method, meaning more depreciation is expensed in the early years of the class life of an asset. To calculate depreciation using this method,...

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link to How to Calculate Units of Activity or Units of Production Depreciation

How to Calculate Units of Activity or Units of Production Depreciation

Units of Activity or Units of Production depreciation method is calculated using units of use for an asset. Those units may be based on mileage, hours, or output specific to that asset. For...

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About the Author

Caroline Grimm is an accounting educator and a small business enthusiast. She holds Masters and Bachelor degrees in Business Administration. She is the author of 11 books and the creator of Accounting How To YouTube channel and blog. For more information visit: https://accountinghowto.com/about/

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