daviniak
Jul 17, 2008, 11:00 AM
Depreciation is the spreading of the cost to purchase a long-lived asset over its useful life. For example a $1,000,000 automobile with a twenty-year useful life would show a depreciation expense of $50,000 for each year of its life. If we didn’t make this adjusting entry, how would our accounting system be affected? What would this mean?