Video instructions and help with filling out and completing Who Form 4797 Individuals

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 for you now next we're going to talk about what we call Book value this is going to be used later on in this series when we talk about declining balance depreciation now what is Book value when you take the cost your asset in the situation is the cost of your car and you subtract what we call accumulated depreciation accumulated depreciation is the sum of all of your depreciation expenses you add all your expenses over the years and it goes into what we call accumulated depreciation once you deduct that out we get to what we call Book value book value is what's left over after you subtract your accumulated depreciation so in this little series we'll talk about three depreciation methods first we have the straight-line method second will be your declining balance and third is your units of production now on a side note I also teach one on one online so if you're interested maybe you're a student or an entrepreneur or anyone that wants to learn more about accounting in the one-on-one setting just let me know my email address is here my phone number is here shoot me a text shoot me an email let me know what you're interested in we can go and set up a free consultation and I can see exactly what you're looking for to pursue this accounting education now thanks for watching today if you like this video go ahead and click on that little icon right there and you can subscribe to my channel also what do you depreciate what kind of objects do you have at your house that you may depreciate I'm actually curious I want to know what you have in your house there you can potentially depreciate go ahead and comment below and let me know also if you got questions I have answers please comment ask me any questions about this video also if you're interested in another topic that I haven't covered yet comment below let me know what it is and I'll create a video just for you once again thanks for watching and I'll see you in the next video