Unscramble Words: Depreciation (business english)


Unscramble Words DepreciationOnline version Unscramble the sentences by VICTOR Mon 1 Depreciation is a crucial________ the cost of expensive assets, like equipment, across their useful life. practice accounting that spreads 2 Depreciation helps businesses _________ large upfront expenses and matches the cost of assets with the revenue they generate over time. appearance from of financial loss the avoid 3 Tangible asset: Depreciation applies to physical assets _______ (often called fixed assets or capital assets). Land is not depreciated since it has an unlimited useful life one than for more to year last expected 4 Useful life: This is the _______ productive for the business, not necessarily how long the equipment will last the estimated time will that be equipment 5 Cost: This includes_________ the asset ready for use (e.g., shipping, installation, and setup). get any to purchase and the price expenses 6 The matching principle: Expenses should be recognized in the same period as the revenues they help generate. A better depiction of a company's financial position Tax benefits: Depreciation is a tax-deductible expense. Managing company assets accounting methods a part Reasons depreciation is crucial of modern 7 Accumulated depreciation: This is the ______. So, if a $50,000 machine depreciates $10,000 annually, its accumulated depreciation would be $30,000 after three years. amount since purchased depreciation the total asset was 8 Carrying value (or book value): This is ________. In our example, the machine's carrying value would be $20,000 after three years. original subtracting from the left what's cost depreciation after accumulated 9 Depreciable base (or depreciable cost): It's not simply the original cost (purchase price plus delivery, etc.) . It's calculated as follows: Cost - Salvage Value = Depreciable Base. depreciation for base calculating , the used depreciation but , 10 Depreciation rate: _______ over its useful life. For example, if a company expects an asset to depreciate $1,000,000 over its lifetime and the annual depreciation is $200,000, the depreciation rate is 20%. depreciates an annual percentage is asset This the which at 11 Salvage value (or residual value): ________ the asset if it's sold, scrapped, or traded in. The longer the useful life, the lower the residual value; sometimes, the salvage value is zero. the receive for what This expects is company to 12 The straight-line method is the simplest and most common. Total depreciation: $45,000 ($50,000 - $5,000 salvage value) Annual depreciation: $9,000 ($45,000 ÷ 5 years) Depreciation rate: 20% (1 ÷ 5 years = 0.20 or 20% per year) the It an evenly across spreads asset's cost life 13 The declining balance method _______ (20% in our example) and applying it to the remaining balance: Year 1: $10,000 ($50,000 × 20%) Year 2: $8,000 ($40,000 × 20%) Year 3: $6,400 ($32,000 × 20%) straight by the using percentage depreciation - accelerates line - 14 _________ (20%), front-loading even more depreciation: Year 1: $20,000 ($50,000 × 40%) Year 2: $12,000 ($30,000 × 40%) Year 3: $7,200 ($18,000 × 40%) This balance declining the rate method doubles 15 Sum-of-the-Years' Digits (SYD) _ differently. For a five-year asset, add years 1+2+3+4+5 = 15. Then use these fractions against the depreciable amount Year 1: $15,000 ($45,000 × 5/15) Year 2: $12,000 ($45,000 × 4/15) Year 3: $9,000 ($45,000 × 3/15) accelerates depreciation calculated is also but method 16 Units of Production ______ If the server is expected to process 1 million computations in its lifetime: Depreciation per computation = $45,000 ÷ 1,000,000 = $0.045 for This accounts time method usage rather than . .

1

Depreciation is a crucial________ the cost of expensive assets, like equipment, across their useful life.

2

Depreciation helps businesses _________ large upfront expenses and matches the cost of assets with the revenue they generate over time.

appearance from of financial loss the avoid

3

Tangible asset: Depreciation applies to physical assets _______ (often called fixed assets or capital assets). Land is not depreciated since it has an unlimited useful life

one than for more to year last expected

4

Useful life: This is the _______ productive for the business, not necessarily how long the equipment will last

the estimated time will that be equipment

5

Cost: This includes_________ the asset ready for use (e.g., shipping, installation, and setup).

get any to purchase and the price expenses

6

The matching principle: Expenses should be recognized in the same period as the revenues they help generate. A better depiction of a company's financial position Tax benefits: Depreciation is a tax-deductible expense. Managing company assets

accounting methods a part Reasons depreciation is crucial of modern

7

Accumulated depreciation: This is the ______. So, if a $50,000 machine depreciates $10,000 annually, its accumulated depreciation would be $30,000 after three years.

amount since purchased depreciation the total asset was

8

Carrying value (or book value): This is ________. In our example, the machine's carrying value would be $20,000 after three years.

original subtracting from the left what's cost depreciation after accumulated

9

Depreciable base (or depreciable cost): It's not simply the original cost (purchase price plus delivery, etc.) . It's calculated as follows: Cost - Salvage Value = Depreciable Base.

depreciation for base calculating , the used depreciation but

,

10

Depreciation rate: _______ over its useful life. For example, if a company expects an asset to depreciate $1,000,000 over its lifetime and the annual depreciation is $200,000, the depreciation rate is 20%.

depreciates an annual percentage is asset This the which at

11

Salvage value (or residual value): ________ the asset if it's sold, scrapped, or traded in. The longer the useful life, the lower the residual value; sometimes, the salvage value is zero.

the receive for what This expects is company to

12

The straight-line method is the simplest and most common. Total depreciation: $45,000 ($50,000 - $5,000 salvage value) Annual depreciation: $9,000 ($45,000 ÷ 5 years) Depreciation rate: 20% (1 ÷ 5 years = 0.20 or 20% per year)

the It an evenly across spreads asset's cost life

13

The declining balance method _______ (20% in our example) and applying it to the remaining balance: Year 1: $10,000 ($50,000 × 20%) Year 2: $8,000 ($40,000 × 20%) Year 3: $6,400 ($32,000 × 20%)

straight by the using percentage depreciation - accelerates line

-

14

_________ (20%), front-loading even more depreciation: Year 1: $20,000 ($50,000 × 40%) Year 2: $12,000 ($30,000 × 40%) Year 3: $7,200 ($18,000 × 40%)

This balance declining the rate method doubles

15

Sum-of-the-Years' Digits (SYD) _ differently. For a five-year asset, add years 1+2+3+4+5 = 15. Then use these fractions against the depreciable amount Year 1: $15,000 ($45,000 × 5/15) Year 2: $12,000 ($45,000 × 4/15) Year 3: $9,000 ($45,000 × 3/15)

accelerates depreciation calculated is also but method

16

Units of Production ______ If the server is expected to process 1 million computations in its lifetime: Depreciation per computation = $45,000 ÷ 1,000,000 = $0.045

for This accounts time method usage rather than .

.

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Depreciation