Depreciation and SNIR Statement Quiz

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Questions and Answers

What is depreciation?

The process of increasing the value of an asset over time
The process of reducing the value of an asset over time (correct)
A report that is available in March
A way to recognize expenses and reduce taxable income

What type of depreciation is the most common?

Linear (correct)
Declining balance
Exceptional
None of the above

What is the SNIR statement?

A report that is available in March that shows the depreciation of your assets (correct)
A way to recognize expenses and reduce taxable income
A statement sent to the tax authorities
A report that is used to identify any significant differences with your 2035 return

Why is depreciation important?

It represents a loss of value over time (D) Signup and view all the answers

What is the SNIR statement used for?

To identify any significant differences with your 2035 return (B) Signup and view all the answers

What happens if there is an unusual discrepancy on the SNIR statement?

The tax authorities may ask for more information (B) Signup and view all the answers

What type of discrepancy is allowed on the SNIR statement?

Moderate (C) Signup and view all the answers

How often is the SNIR statement sent to the tax authorities?

Every year (C) Signup and view all the answers

What does the SNIR statement cover?

Reimbursements per calendar year (D) Signup and view all the answers

What is the purpose of depreciation?

To recognize expenses and reduce taxable income (A) Signup and view all the answers

Study Notes

depreciation is the process of reducing the value of an asset over time
it can be done in linear, declining balance or exceptional depreciation
the most common type of depreciation is linear
depreciation is used to recognize expenses and reduce taxable income
the SNIR statement is a report that is available in March that shows the depreciation of your assets
depreciation is important because it represents a loss of value over time
The SNIR statement is sent to the tax authorities and is used to identify any significant differences with your 2035 return.
A moderate discrepancy is allowed, as the SNIR statement covers reimbursements per calendar year, as we will see below.
If there is an unusual discrepancy, the tax authorities, and even your AGA, may ask you for more information. Without an explanation from you, they may simply reject your accounting.

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Description

Test your knowledge about depreciation, the process of reducing the value of an asset over time, and the SNIR statement, a report that shows the depreciation of your assets and its implications for tax returns.