Calculating and Recording Depreciation — Straight-Line and Reducing-Balance Methods

What this note covers

1. What Depreciation Is and Why It Matters
2. The Straight-Line Method — Formula, Logic and Worked Example
3. The Reducing-Balance Method — Formula, Logic and Worked Example
4. Recording Depreciation — General Journal and General Ledger
5. Balance Sheet Disclosure — Contra Asset Treatment
6. Comparing the Two Methods — Matching Economic Benefits and the Consistency Principle
7. Applying Both Methods Together — Comprehensive Scenario

7 sections · 14 key terms & formulas · 6 common mistakes