Depreciation
Definition
The gradual reduction in value of a fixed asset over its useful life. Common methods include straight-line and declining balance. In the US, Section 179 allows immediate expensing of qualifying assets.
Related Terms in Core Accounting
Double-Entry Bookkeeping
An accounting system where every transaction is recorded in at least two accounts — a debit and a credit — ensuring the accounting equation (Assets = Liabilities + Equity) always balances. HelloBooks uses double-entry automatically.
General Ledger (GL)
The master record of all financial transactions for a business, organized by account. Every entry in the GL follows double-entry bookkeeping. HelloBooks maintains your GL automatically from invoices, bills, payments, and journal entries.
Gross Profit
Revenue minus cost of goods sold (COGS). Represents the profit before operating expenses, taxes, and interest. Gross profit margin (gross profit / revenue) indicates pricing efficiency.
Journal Entry
A record of a financial transaction in the general ledger, showing debits and credits. Manual journal entries handle adjustments, corrections, and non-standard transactions that don't originate from invoices or bills.
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