Depreciation

Please choose the most appropriate answer for each sentence.
  • 1

    The idea of depreciation is quite straightforward; for instance, a forklift is an operational asset for a company's business, and each year it loses a certain amount of value until at last it is ..... and has no value for the company.

  • 2

    Calculating and ..... for this loss in value of such an asset is called depreciation.

  • 3

    Almost all companies invest in vehicles, furniture, machinery or buildings, and those that will be used for more than one year are considered ..... assets.

  • 4

    However, the entire cost of such an asset cannot be ..... in the year it is acquired.

  • 5

    If a business reduced a single year's income by the total cost of such an asset, it would result in a profit understatement in that year and a profit overstatement during the ..... years.

  • 6

    For assets that have a useful life of more than one year, the cost must be ..... off over at least two years.

  • 7

    The yearly depreciation for an asset is calculated using its ..... cost and the number of years that it will presumably retain some value.

  • 8

    At the end of each year, the annual depreciation is subtracted from the asset's cost; this determines its ..... value, which presumably is the same as its market value.

  • 9

    Straight ..... depreciation, the most common method of depreciating assets, simply divides the initial cost of an asset by the number of years that it will presumably be of use.

  • 10

    The ..... balance method presumes that the asset depreciates more when it is newer and less as it ages and wears.

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