Chapter 7 of the Kaplan Financial Accounting study text explains the depreciation of non-current assets, covering methods like Straight-Line, Reducing Balance, and Units of Production. It discusses accounting entries for depreciation, asset revaluation, impairment, and disclosure requirements in financial statements.
This section covers journal entries, the initial recording of financial transactions using debits and credits. It explains how these entries are documented with proper narration to provide context. It then introduces the ledger, where journal entries are posted to individual accounts to organize financial data. Finally, it leads to the accounting equation (Assets = Liabilities + Equity), which illustrates the balance between resources and claims against them, forming the basis of financial accounting.