Explain the Accounting Equation and Define Its Terms

question 43

Essay

Explain the accounting equation and define its terms.

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Definitions:

Depreciation

The planned apportionment of a tangible asset's cost over the time it is useful.

Salvage Value

The estimated resale value of an asset at the end of its useful life, important for depreciation calculations.

Market Value

Market value is the current price at which an asset or service can be bought or sold in a marketplace, often influenced by supply and demand dynamics.

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose.