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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Depreciating Assets

When you set up the chart of accounts, you set up accounts for accumulating depreciation. Now it’s time to put them to use. Depreciation plays two roles: one as an expense and the second as a deduction on your taxes. Most businesses adjust for depreciation only once a year because it’s easier, after taxes have been filed, but some businesses prefer to match the expense with income on a monthly basis. Both methods are acceptable.
Many businesses use two different methods of depreciation: one for tax purposes and a second for business statements. Tax incentives enable you to write off your assets more quickly, but the information on assets that you track to take advantage of this tax benefit is different from how you track ...

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