Explain the Benefits of Incorporation

question 4

Essay

Explain the benefits of incorporation.

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Definitions:

Double-Declining-Balance Rate

A method of accelerated depreciation where an asset's book value is reduced at double the rate of its straight-line depreciation each year.

Double-Declining-Balance Depreciation

A method of accelerated depreciation that applies twice the normal depreciation rate on the declining balance of an asset.

Straight-Line Depreciation

A technique for spreading the expense of a physical asset evenly across its lifespan.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.