Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.

Question

Business

Tamia Wood

2 September, 21:14

Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.

+5

Answers (1)

Know the Answer?

Susan Morse · Answer 1

IAS 16 states that the cost of an item of property, plant and equipment shall be recognized as an asset if, and only if: it is probable that future economic benefits associated with the item will flow to the entity; and. the cost of the item can be measured reliably.

Explanation:

Basically the depreciation will reduce the asset value in the assets account