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MalMax purchased a depreciable asset. What would be the difference in total assets at the end of

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MalMax purchased a depreciable asset. What would be the difference in total assets at the end of the first year if MalMax chooses straight-line depreciation versus doubledeclining-balance depreciation?


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SOUMYAJIT SUR
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Survey of Accounting

Survey of Accounting

ISBN: 978-0073379555

2nd edition

Authors: Edmonds, old, Mcnair, Tsay

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In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue

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