Who Form 4797 Individuals 2022-2023

Instructions and Help about Who Form 4797 Individuals

Hey there students welcome to the next video today we're going to talk about what is depreciation now what is it I'm sure you've heard that word before let's talk about what it is and a few other terms that are involved now let's say you buy a car you're going to buy it with cash now do you consider this an expense when you buy that car if you said yes I'm afraid you're incorrect not in accounting when you buy a car or any other type of equipment building land any type of fixed asset is what we call it you capitalize it you don't expense it so when you buy that car when you capitalize it it goes on your balance sheet as illustrated here when you buy that car it goes on your balance sheet we call that capitalization capitalizing something is when you don't expense it right away you actually put it as an asset on your balance sheet now over time as you start to use this car that is when you slowly expense it so as I was saying when you start using that car and you start using it over time that car is slowly expensed that's what we call a depreciation expense as you slowly use it and time passes you expense that car and that depreciation expense goes on your income statement now assets balance sheet income statement if you're not sure what those are that's okay I actually just created a full course where you can analyze financial statements you can learn all about the balance sheet all about the income statement cash flow statement and much much more look in the description box below or you can go and check out that course and see if it's right...