Unit 7: Depreciation and Amortization

USA

This unit, deals with two of the hardest concepts in accounting. depreciation, and amortization. Even just saying these terms can be hard for non-native speakers!

Did you know? The following activities can be customized as desired by the teacher or school pedagogue.

Basic activities (computer-graded)

Vocabulary Builder Activity

Students will learn the following key terms and phrases:

Reading Activity: Depreciation and Amortization

Students will be able to correctly answer true/false questions after reading and listening to topical short articles and dialogs featuring topical vocabulary.

If you ask any newly qualified accountant what they find hardest, they will almost certainly answer depreciation and amortization. But why do people find these two concepts so hard to master? Well, for one thing depending on where you are located the terms may mean the same thing, or may have decidedly different meanings. Both depreciation and amortization are key aspects of accrual… Continue

Multiple Choice Activity

Students will be able to select the best match between unit terms and their definitions.

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Listening Comprehension Activity

Students will be able to listen to short audio clips in English and then spell them correctly.

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Spelling and Recognition

Students will be able to identify and spell a vocabulary term correctly given only the definition.

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Advanced activities (optionally teacher-graded)

Speaking Practice Activity

Students will be able to speak and record 5 example sentences from the unit vocabulary and then submit them for grading by the classroom teacher. If no teacher is available or desired, then the students will be shown good examples of other students' work.

The company purchased a $16,000 forklift for use in its warehouse and believes it'll be able to resell the forklift for a salvage value of $1,000 at the end of 8 years.

The car was purchased for $30,000, now only one year later the net-book value is $22,000, which shows a depreciation rate of $8,000 in year one.

A lot of people are put off by the sum-of-years-digits method of depreciation, as it can seem complicated, but it does have some advantages.

Not having much experience in accounting, he chose the straight line method of depreciation as it appeared to be the easiest to understand.

If you multiply two by three, you'll get six.

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Writing Practice Activity

Students will write a short essay to be graded by the teacher. If no teacher is available or desired, then the student is shown previous examples of other writings by students.

Why do you think depreciation and amortization are so important in accounting?

Are there any assets that you think should not be depreciated? Why?

Which types of assets are best depreciated using: a) The straight line method? b) The sum-of-years-digits method? c) The annuity method?

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