Depreciation refers to
spreading out the cost of a fixed asset over the years of its useful life to a
business, instead of charging the entire cost to expense in the year the asset
was purchased. Depreciation expense is that portion of the total cost of a
business's fixed assets that is allocated to the period to record the cost of
using the assets during period. The higher the total cost of a business's fixed
assets, then the higher its depreciation expense.
Depreciation is an expense that's recorded at the same time and in the same period as other accounts. Depreciation refers to spreading out the cost of a fixed asset over the years of its useful life to a business, instead of charging the entire cost to expense in the year the asset was purchased. The idea is to charge a fraction of the total cost to depreciation expense during each of the five years, rather than just the first year.
Depreciation applies only to fixed assets that you actually buy, not those you lease or rent. Depreciation is a real expense, but not necessarily a cash outlay expense in the year it's recorded. The cash outlay does actually occur when the fixed asset is acquired, but is recorded over a period of time.
Depreciation expense is that portion of the total cost of a business's fixed assets that is allocated to the period to record the cost of using the assets during period. The higher the total cost of a business's fixed assets, then the higher its depreciation expense.
Depreciation is an expense that's recorded at the same time and in the same period as other accounts. Depreciation refers to spreading out the cost of a fixed asset over the years of its useful life to a business, instead of charging the entire cost to expense in the year the asset was purchased. The idea is to charge a fraction of the total cost to depreciation expense during each of the five years, rather than just the first year.
Depreciation applies only to fixed assets that you actually buy, not those you lease or rent. Depreciation is a real expense, but not necessarily a cash outlay expense in the year it's recorded. The cash outlay does actually occur when the fixed asset is acquired, but is recorded over a period of time.
Depreciation expense is that portion of the total cost of a business's fixed assets that is allocated to the period to record the cost of using the assets during period. The higher the total cost of a business's fixed assets, then the higher its depreciation expense.
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