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Depreciation & Salvage Values Flashcards

Depreciation & Salvage Values Flashcards
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Calculating Units of Production Depreciation
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Calculating Units of Production Depreciation
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Units of Production Depreciation
A method of calculating depreciation that is useful for items used inconsistently from year to year. To calculate: divide the cost by the number of uses expected to get the per-use depreciation.
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Calculating Double Declining Balance Depreciation
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Double Declining Balance Depreciation
Used to calculate depreciation for items used consistently and more often than expected use. To calculate: double percent lost each year, multiply by item's yearly value for yearly depreciation.
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Calculating Straight-Line Depreciation
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Straight-Line Depreciation
A method of calculating depreciation that is useful for items used consistently from year to year. To calculate: divide the cost by its life expectancy to get the yearly depreciation.
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Depreciation
This describes the value an item loses over time.
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16 cards in set

Flashcard Content Overview

In business and in life, there is a concept that is relatively easy to understand but often hard to accept: depreciation. Depreciation basically means that from the moment you purchase something, its value plummets. That $45,000 company car might get you $20,000 if you try to sell it after just a few years of driving it. Your company's insurance may only cover part of the cost of a damaged printer depending on how long or how many times it has been used. How does all of this fit into your company budget? This set of flashcards will help you review different ways that depreciation and an item's value are calculated.

Additional Study

This lesson requires a basic understanding of how to work with percentages. To learn more about percentages, please refer to the following lessons:

Front
Back
Depreciation
This describes the value an item loses over time.
Straight-Line Depreciation
A method of calculating depreciation that is useful for items used consistently from year to year. To calculate: divide the cost by its life expectancy to get the yearly depreciation.
Calculating Straight-Line Depreciation
Double Declining Balance Depreciation
Used to calculate depreciation for items used consistently and more often than expected use. To calculate: double percent lost each year, multiply by item's yearly value for yearly depreciation.
Calculating Double Declining Balance Depreciation
Units of Production Depreciation
A method of calculating depreciation that is useful for items used inconsistently from year to year. To calculate: divide the cost by the number of uses expected to get the per-use depreciation.
Calculating Units of Production Depreciation
Calculating Units of Production Depreciation
Partial-Year Depreciation
A method of calculating monthly depreciation for item. To calculate: divide the cost by its life expectancy, then divide that by 12 to get the monthly depreciation.
Calculating Partial-Year Depreciation
Sum of Years' Digits Method of Depreciation
A method of calculating depreciation for items that experience declining use over their lifespan.
Calculating Sum of Years' Digits Method of Depreciation

1. Add life expectancy years (if 3, add 1+2+3).

2. Calculate each year's depreciation percentage: divide years remaining by Step 1 sum.

3. Multiply cost by percentage for that year's depreciation.

Calculating Sum of Years' Digits Method of Depreciation
Calculating Sum of Years' Digits Method of Depreciation
Calculating Double Declining Balance Method of Depreciation
Calculating Double Declining Balance Method of Depreciation

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