Question

In: Accounting

Discuss critically the challenges for a small business of calculating fixed asset depreciation.

Discuss critically the challenges for a small business of calculating fixed asset depreciation.

Solutions

Expert Solution

In many cases unless you have very sophisticated accounting software or a fixed assets module that will automatically calculate depreciation rate for you.you will be calculating depreciation manually , and later entering it in to the appropriate journal or as a journal entry in your accounting software.

Recording depreciation will affect both your income statement and your balance sheet . Recording depreciation is considered an adjusting journal entry, which are the entries that are completed prior to running your adjusted trial balance.

In many accounting software applications that do not have the capability to tracked fixed assets you will be recording depreciation expenses manually.

Unless you have a fixed asset module or add on application that works with your accounting software , you will still have to enter depreciation totals manually as a journal entry in to your accounting software .

For the reason most small business owners will find that straight line depreciation is the simplest method to use.


Related Solutions

Discuss critically the challenges for a small business of calculating fixed asset depreciation.
Discuss critically the challenges for a small business of calculating fixed asset depreciation.
Discuss critically the challenges for a small business of calculating fixed assets depreciation.
Discuss critically the challenges for a small business of calculating fixed assets depreciation.
QUESTION 2 [10 MARKS] 2.1 Discuss critically the challenges for a small business of calculating fixed...
QUESTION 2 [10 MARKS] 2.1 Discuss critically the challenges for a small business of calculating fixed asset depreciation. (5) 2.2 What is residual value, and how does it differ from the estimated useful life of an asset? (5)
Discuss/explain the three main methods of calculating depreciation. How does a business choose which method to...
Discuss/explain the three main methods of calculating depreciation. How does a business choose which method to use? Is depreciation a good thing or a bad thing? Explain
If a fixed asset with an original cost of 18,000 and accumulated depreciation of 2000 and...
If a fixed asset with an original cost of 18,000 and accumulated depreciation of 2000 and sold for 15,000 the company must
This project challenges you to critically discuss fiscal and monetary policies as well as their combined...
This project challenges you to critically discuss fiscal and monetary policies as well as their combined use in the IS/LM model. To do so, first, carefully study the textbook Focus on "The US recession of 2001," and think through the effectiveness of the policy mix adopted to aid recovery. Second, consider the possibility that the US would slip into a hypothetical recession now: argue on the basis of your understanding of IS/LM and the current US macroeconomic trajectory for a...
Critically discuss the challenges teachers experience when teaching economics in rural areas
Critically discuss the challenges teachers experience when teaching economics in rural areas
Critically discuss the challenges facing McDonalds and Yum in India and whether the models will need...
Critically discuss the challenges facing McDonalds and Yum in India and whether the models will need to be further changed if economic growth slows.
What is depreciation and the purpose? Does the book value of a fixed asset (cost minus...
What is depreciation and the purpose? Does the book value of a fixed asset (cost minus accumulated depreciation) communicate to a user what the asset is worth? Why or why not? Should the financial statements reflect the value of fixed assets? Why or why not?
Explain briefly the main challenges of business process integration for a small business with example ?
Explain briefly the main challenges of business process integration for a small business with example ?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT