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If depreciation is charged on original cost than which method of depreciation should be used?
Wiki User
∙ 11y ago
kavita purchased machinery of rs 5 lak on 1 jan 2007 she also paid instullation charged rs 5o thousand, she sold the machinary 2011 rs 4 lack
depreciation is charged at 10 % on 31 dec
pass the necessary journal entry under original cost method.
Wiki User
∙ 11y ago
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In what way is the concept of consistency applies to depreciation?
Consistency is a concept used when applying accounting methods to a business, the business must continue to use that particular method. For an example if a company is charging depreciation using the straight line method, they must stick with the straight line method. According to this concept,whatever accounting practices(whether logical or not) are selected for a given category of transactions,they should be followed from one accounting period to another to achieve compatibility for example:if depreciation is charged according to a particular method it should be followed year after year for the purpose of comparison. Omair shehzad
What is provision for depreciation?
Provision of depreciation account is the account of provision of depreciation.First of all we should understand provision of depreciation .Provision of depreciation is the collected value of all depreciation. With making of this account we are not credited depreciation in asset account. But transfer every year depreciation to provision of depreciation account. Every year we adopt this procedure and when assets are sold we will transfer sold assets 'total depreciation to credit side of asset account. For calculating correct profit or loss on fixed asset. This provision uses with any method of calculating depreciation.
What should be deducted from net income in calculating net cash flow from operating activities using the indirect method?
Depreciation expenses
Why should you add indirect taxes and depreciation?
why should we add indirect taxes and depreciation?
How should depreciation be treated in budget preparation by a nonprofit corporation?
How should depreciation be handled in a non profit budget?
Can a company change the method of providing depreciation?
A company can change its method of providing Depreciation, (a) If it is necessitated by Statue or standard, or (b) If it would result in more Appropriate preparation or presentation of Financial Statement...
In what way is the concept of consistency applies to depreciation?
Consistency is a concept used when applying accounting methods to a business, the business must continue to use that particular method. For an example if a company is charging depreciation using the straight line method, they must stick with the straight line method. According to this concept,whatever accounting practices(whether logical or not) are selected for a given category of transactions,they should be followed from one accounting period to another to achieve compatibility for example:if depreciation is charged according to a particular method it should be followed year after year for the purpose of comparison. Omair shehzad
Why should depreciation be treated as expense?
Depreciation is a portion of fixed asset charged to income statement due to wear and tear of assets during use in business in fiscal year that's why that wear and tear is accounted for by using depreciation.
Discuss the consistency concept in accounting?
Consistency is a concept used when applying accounting methods to a business, the business must continue to use that particular method. For an example if a company is charging depreciation using the straight line method, they must stick with the straight line method. According to this concept,whatever accounting practices(whether logical or not) are selected for a given category of transactions,they should be followed from one accounting period to another to achieve compatibility for example:if depreciation is charged according to a particular method it should be followed year after year for the purpose of comparision.
What are the effect of depreciation on profit and loss and balance sheet?
Depreciation is an expense. It should be charged under expense of a P&L Statement. Provision for Depreciation is the total depreciation of a particular fixed asset accumulated over the years. It should be deducted from the figure of the Fixed asset.
What is provision for depreciation?
Provision of depreciation account is the account of provision of depreciation.First of all we should understand provision of depreciation .Provision of depreciation is the collected value of all depreciation. With making of this account we are not credited depreciation in asset account. But transfer every year depreciation to provision of depreciation account. Every year we adopt this procedure and when assets are sold we will transfer sold assets 'total depreciation to credit side of asset account. For calculating correct profit or loss on fixed asset. This provision uses with any method of calculating depreciation.
Matching concepts of depreciation?
basic matching concept of account is that all expenses of same fiscal years should be matched with revenues of that fiscal year and depreciation is also charged for that portion of asset which is used in specific fiscal year.
What should be deducted from net income in calculating net cash flow from operating activities using the indirect method?
Depreciation expenses
Why should you add indirect taxes and depreciation?
why should we add indirect taxes and depreciation?
What is accumulated depreciation?
The accumulated deprecation is the all the depreciation amounts should be the accumulated depreciation.
How should depreciation be treated in budget preparation by a nonprofit corporation?
How should depreciation be handled in a non profit budget?
The inventory costing method that is based on the assumption that costs should be charged against revenue in the order in which they were incurred is?
FIFO
