This section is from the book "Real Estate Accounts", by Walter Mucklow. Also available from Amazon: Real Estate Accounts.
This account is intended to represent the actual value of motor cars owned by the concern. Three of the cars being new, no depreciation was taken on them. A fourth car had been reduced annually by 25% of its original cost, and it is believed this is a fair standard rate. All repairs are charged to the Expense account direct; for if they were charged to Automobiles account, the calculation of depreciation would be involved unnecessarily. Some conservative business men claim that the life of a motor is so uncertain a quantity that the original cost of all cars should be charged direct to Expense, but this is a rather extreme view inasmuch as a second-hand car has an actual selling value.
 
Continue to: