In Canada, We Have Business and Non-Business Organizations

question 32

Essay

In Canada, we have business and non-business organizations.
Required:
Explain the difference between these two types of organizations. Why should they be allowed to follow different accounting policies?

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Definitions:

Double-declining-balance Method

A depreciation approach that speeds up the process by using a rate twice that of the typical straight-line method.

Sales Price

The amount of money charged for a product or service, or the sum a customer pays to purchase something.

Salvage Value

The presumed value for resale of an asset at life’s operational end.

Depreciation

The methodical reduction of the recorded cost of a fixed asset to allocate its expense over its useful life.