Accounting Dictionary

Depreciation Expense

Depreciation is the portion of the cost of a tangible asset that can be deducted each year.

If you bought a freezer that costs $50,000 and it is expected to last 10 years, $50,000/10 years = $5,000. Every year for 10 years you could deduct $5,000 on your income statement. This is straight line depreciation.

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