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?

    <p>It represents a loss of value over time</p> Signup and view all the answers

    What is the SNIR statement used for?

    <p>To identify any significant differences with your 2035 return</p> Signup and view all the answers

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

    <p>The tax authorities may ask for more information</p> Signup and view all the answers

    What type of discrepancy is allowed on the SNIR statement?

    <p>Moderate</p> Signup and view all the answers

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

    <p>Every year</p> Signup and view all the answers

    What does the SNIR statement cover?

    <p>Reimbursements per calendar year</p> Signup and view all the answers

    What is the purpose of depreciation?

    <p>To recognize expenses and reduce taxable income</p> 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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    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.

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