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Positive Operating income will result if gross profit exceeds operating expenses
expenses
Depreciation policy is management thing that what depreciation method to use and how much depreciation to charge to each asset. Depreciation concepts are concepts which govern the depreciation process which management cannot change they are universal rules to follow depreciation that how straight line depreciation work etc.
The basic equation goes: Gross Revenues - (Operational Costs + Cost of Goods Sold + Payroll + Depreciation/Amortization + Taxes) = Profit or (Loss)
Debit depreciation accountCredit accumulated depreciation
when depreciation exceeds gross investment
Depreciation expenses is for one specific fiscal year while accumulated depreciation is the sum of all depreciation expenses that’s why accumulated depreciation exceeds the depreciation if there is depreciation expense in prior year as well.
Positive Operating income will result if gross profit exceeds operating expenses
Gross Block=Cost of fixed assets(cost of accumalating the asset)+depreciation.
Gross DSCR= Cash accruals ( Profit after tax + Depreciation) + Interest ----------------------------------------------------------- Installments of loan + Interest Net DSCR = Cash Accruals (PAT + Depreciation) -------------------------------------- Installments
expenses
is net invesment = gross investment - depreciation
(gross national product or GNP) minus depreciation = net national product
Albert Gross has written: 'Investition' -- subject(s): Accounting, Capital, Capital investments
A and C Net national product/ depreciation net national product/ capital consumption
Gross National Product [GNP] is the gross value of all the final products without deducting the depreciation of fixed capital. It is the total of market value of final goods and services produced in a years. Net National Product [NNP] is the value of net output in an economy during a period of one year. The net national product is calculated by deducting depreciation from the gross national product. NNP = GNP - Depreciation
Net block is the gross block less accumulated depreciation on assets. Net block is actually what the asset are worth to the company