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Depreciation continues to be one of the most controversial, difficult, and important problem areas in accounting. Required: Explain the conventional accounting concept of depreciation accounting.
Depreciation continues to be one of the most controversial, difficult, and important problem areas in accounting.
Required:
- Explain the conventional accounting concept of depreciation accounting.
- Discuss its conceptual merit with respect to
- The value of the asset
- The charge(s) to expense
- The discretion of management in selecting the method
- Explain the factors that should be considered when applying the conventional concept of depreciation to the determination of how the value of a newly acquired computer system should be assigned to expense for financial reporting purposes (ignore income tax considerations).
- What depreciation methods might be used for the computer system? Describe the advantages and disadvantages of each.
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