Question
Case 9-6 Depreciation Accounting Property, plant, and equipment (plant assets) generally represent a material por-tion of the total assets of most companies. Accounting for the
Case 9-6 Depreciation Accounting Property, plant, and equipment (plant assets) generally represent a material por-tion of the total assets of most companies. Accounting for the acquisition and use of such assets is therefore an important part of the nancial reporting process. Required: a. Distinguish between revenue and capital expenditures, and explain why this distinction is important. b. Briey dene depreciation as used in accounting. c. Identify the factors that are relevant in determining the annual deprecia-tion, and explain whether these factors are determined objectively or whether they are based on judgment. d. Explain why depreciation is shown as an adjustment to cash in the opera-tions section on the statement of cash ows.
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