Intermediate Accounting Exam 2 Review with Complete Solutions | Verified & Updated

Intermediate Accounting Exam 2 Review with Complete Solutions | Verified & Updated Depreciation is not a matter of valuation - It is a process of cost allocation. Book value = - Carrying Value = Historical (original) cost - Accumulated depreciation What does the balance sheet show for the value of a depreciable asset? - Book value What are the types of depreciation? - 1.) Straight-line Method 2.) Accelerated Depreciation 3.) Double Declining-Balance Method 4.) Sum-of-the-years'-digits Method 5.) Units-of-output Method 6.) Working hours Method What method is used for financial statements? - Straight-Line Method What method is used for taxes? - MACRS Formula for SL Method depreciation expense: - (Historical cost - Estimated Salvage Value) / Estimated useful life