Most companies will not use the double-declining balance method of depreciation on their financial statements. The reason is that it causes the company’s net income in the early years of an asset’s life to be lower than it would be under the straight-line method.

One reason for using double-declining balance [...] Continue Reading…

A natural business year is the period of 12 consecutive months (or 52-53 consecutive weeks) ending at a low point of an organization’s activities. For example, a school district will have a natural business year of July 1 through June 30, since classes for the school year end in [...] Continue Reading…

A ledger is often defined as a book of accounts. Today a ledger is most likely an electronic record or file containing a group of accounts. For example, a company’s general ledger is the record containing all of its asset, liability, owner equity, revenue, expense, gain, and loss accounts. [...] Continue Reading…

Land is not depreciated because land is assumed to have an unlimited useful life.

Other long-lived assets such as land improvements, buildings, furnishings, equipment, etc. have limited useful lives. Therefore, the costs of those assets must be allocated to those limited accounting periods. Since land’s life is not limited, there [...] Continue Reading…

AccountingCoach.com has developed 80 business forms to help you prepare financial statements or to calculate financial ratios, breakeven points, standard costing variances, and more. Each of the 80 forms comes in two formats: blank and filled-in.

The business forms are professionally designed to help you learn and save time. You [...] Continue Reading…