Business Accounting and Bookkeeping

Is depreciation charged on the original cost or the difference between original cost and salvage value in written down value method?

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2014-03-29 08:31:35
2014-03-29 08:31:35

Under written down balance method depreciation is charged from original value and after that on written down balance until useful life of asset and any amount remaining at the end of useful life is the salvage value.

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Related Questions


Accumulated depreciation shows the depreciation for specific asset which is already charged while provision of depreciation is created to charge depreciation before actual depreciation is occur.

Building is an asset for business and depreciation is only charged to assets of business so in this way depreciation is charged to building as well.

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.

Cost of depreciation assets and accumulated depreciation is same as accumulated depreciaton calculates how much depreciation is charged till date while remaining is current book value of assets.

Debit to Cash (or Accounts Receivable) for the sale Price. Debit to Accumulated Depreciation for the total amount of depreciation charged against that piece of equipment since its original purchase date. Credit to Equipment account for the original purchase price. Credit to Gain on Sale of Fixed Asset (or Other Income) for the difference needed to balance the entry.

Depreciation is a charge to the Profit and Loss account or Income statement that shows the charge to a fixed asset (or group of fixed assets) in that period. Accumulated Depreciation is the total depreciation charged to that fixed asset since it was purchased and is shown in the balance sheet reducing the value at purchase to the value at which it is currently held (its Net Book Value).

Depreciation is charged to tangible assets while amortization is used to charge intangible assets.

Depreciation is a period cost and not a product cost as depreciation is still charged even if there is no production or sale of goods.

Depreciation is always charged on fixed assets and it does not has any relation with individual or company status.

Under straight line depreciation, fixed amount of depreciation is charged to every year while in declining balance method depreciation percentage remains same but depreciation is charged on remaining balance of asset due to which the amount of depreciation is different in every year.

DR. DEPRECIATION EXPENSE X CR. ASSET X At the end of the year Depreciation is charged to the Income Statement.

amount charged to depreciation expense since the acquisition of the plant asset.

Depreciation on Mobile Phone will be charged @ 15%.

Yes depreciation is an operating expense because depreciation is charged due to usage of assets in operations and taking part in generating revenue and if there is no operations then there is no need to utilization of asset and then there is no depreciation expense as well.

Straight line depreciation method is that method in which fixed amount of depreciation is charged to all fiscal years in which that asset is used.

Depreciation is charged to fixed assets so that cost of fixed assets can be allocate to all those fiscal years in which that fixed assets is used.

a proton is positively charged and an electron is negatively charged

because whin using the composite depreciation or group depreciation method and want to sale an asets we make the cash is debt by the cash received and credit the assets by original cost and the diferrince debt accomulated depreciation , then the account of accomualted deprciation in the balance sheet will not the same as depriciation expene in the income statement

When a company buys an asset they have to spread the cost of the asset over it's useful economic lifetime, this is done with depreciation. The accumulated depreciation is the depreciation from previous years and the charge for the year is the amount being depricated that year, which will be charged to the profit and loss. The assets will shows as a debit balance while depreciation will show as a credit balance in the balance sheet. When charge the depreciation for the year you would credit the balance sheet and debit the profit and loss. So after the asset has come to the end of it's useful economic lifetime the value in the balance sheet will become zero or close to it as the credits of depreciation will cancel out the debit if the asset value.

In sum of year digit depreciation method depreciation is charged based on total number of years fixed assets is usable in business instead of using any percentage or fixed amount of depreciation.

Depreciation expense reduce the cost of asset through income statement for the useful life of asset and accumulated depreciation account is contra account for asset account in balance sheet to show the total amount of depreciation charged.

no depriciation is usually not charged on capital WIP

Depreciation is a fixed cost as it does not vary with variation in production volume and even charged when there is no production at all.


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