17. Jackson Company purchased $ 50,000 in equipment on July 1 , 2021. The equipment had a 10 - year useful life ( no salvage ) and Jackson normally used the straight - line method of depreciation with no special first year conventions . The equipment was written off to office expense when purchased, but the error was not the discovered until near the end of 2022 ( this year is still open ) What is the effect of the error on the 2021 and 2022 net income ? A,B,C,orD
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
17. Jackson Company purchased $ 50,000 in equipment on July 1 , 2021. The equipment had a 10 - year useful life ( no salvage ) and Jackson normally used the straight - line method of
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