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Depreciation for Partial Years definitions Flashcards

Depreciation for Partial Years definitions
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  • Partial Depreciation
    Allocation of an asset's cost over only the portion of the year it was owned, rather than the entire year.
  • Straight-Line Method
    Depreciation approach that spreads an asset's depreciable cost evenly over its useful life.
  • Double Declining Balance
    Accelerated depreciation method applying twice the straight-line rate to the asset's book value each year.
  • Units of Production Method
    Depreciation technique based on actual usage or output, not affected by the purchase date within the year.
  • Residual Value
    Estimated amount expected to be recovered at the end of an asset's useful life.
  • Useful Life
    Expected period over which an asset will be productive for its owner.
  • Depreciation Expense
    Portion of an asset's cost allocated to expense during a specific accounting period.
  • Accumulated Depreciation
    Total depreciation recorded against an asset since its acquisition.
  • Net Book Value
    Asset's original cost minus accumulated depreciation, representing its carrying amount on the balance sheet.
  • Proration
    Adjustment process to allocate an annual amount based on the fraction of the year an asset was owned.
  • Journal Entry
    Formal accounting record documenting the debit and credit effects of a transaction.
  • Cost
    Total amount paid to acquire an asset, including purchase price and any additional expenditures.
  • Time Factor
    Fraction representing the portion of the year an asset was held, used to calculate partial depreciation.