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When debit amount of profit and loss account is greater than the credit amount you say the firm is in loss but when assets of the firm increases you take it as debit ac how?
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∙ 12y ago
You will take 500 dollards and put 7 on
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∙ 12y ago
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When debit amount of profit and loss account is greater than the credit amount you say the firm is in loss but when assets of the firm increases it is taken as debit ac how?
It is gained.
How does rendering of services on account affect the accounting equation?
Rendering services on account increases accounts receivable, as well as equity (retained earnings) For example, a company has provided cleaning services for an amount of $200; the customer is allowed a three week credit assets = liabilities + equity accounts receivable (assets): increases with +200 retained earnings (equity): increases with + 200 +200 = +200
If a company purchase equipment on account will the assets increase decrease or stay the same?
If the equipment is purchased on credit (on account) then the net assets will stay the same as the assets will increase by the same amount as the liabilities
When account receivabes is collected cash the totl assets of the business increases?
Accounts receivable is also part of assets of business and cash as well so there is no difference on overall assets of business.
Why in internal reconstruction capital reduction account is being prepared?
it is prepared so the amount reduced will be utilised in writing of fictitious assets, some intangible assets and the over valued portion of fixed assets
When debit amount of profit and loss account is greater than the credit amount you say the firm is in loss but when assets of the firm increases it is taken as debit ac how?
It is gained.
How does rendering of services on account affect the accounting equation?
Rendering services on account increases accounts receivable, as well as equity (retained earnings) For example, a company has provided cleaning services for an amount of $200; the customer is allowed a three week credit assets = liabilities + equity accounts receivable (assets): increases with +200 retained earnings (equity): increases with + 200 +200 = +200
If a company purchase equipment on account will the assets increase decrease or stay the same?
If the equipment is purchased on credit (on account) then the net assets will stay the same as the assets will increase by the same amount as the liabilities
When account receivabes is collected cash the totl assets of the business increases?
Accounts receivable is also part of assets of business and cash as well so there is no difference on overall assets of business.
When an owner invests assets in the business the capital account increases due to revenue being earned?
yes it does
What balance sheet accounts are affected by the sale of an asset?
Sale of assets reduces the asset account as well as accumulated depreciation account while increases the cash or bank account
What is OD account?
od account or the overdraft account is an account from which the depositor can draw more amount than that is available in the account.This is given on the basis of fd,assets etc.
How does purchases on account affect the balance sheet?
Purchases on account increases both Assets and Liabilities. Since a purchase on account becomes and account payable it is a liability account and the company's liabilities will increase the amount of the purchase. More than likely the purchase is for some type of equipment or supplies the company needs to operate and therefore is an asset to the company and that asset will increase by the same amount. Let's say Company X purchases $5,000 in supplies from company Z on account, Company X will record the transaction as follows. Supplies (dr) $5,000 Acc.Pay. Comp. Z (cr) $5,000 Remember Assets = Liabilities + Equity Assets increase with a debit Liabilities and Equity increase with a credit.
Why in internal reconstruction capital reduction account is being prepared?
it is prepared so the amount reduced will be utilised in writing of fictitious assets, some intangible assets and the over valued portion of fixed assets
What contra account is used when recording and reporting the effects of depreciation and why is it used?
The contra account that is used when recording and reporting the effects of depreciation is called amortization of assets. This account is used to reduce the dollar amount of the asset periodically over time to bring assets to current costs.
What type of account is the accumulated depreciation account?
It is categorized as a contra account. Essentially, it reduces the amount shown on the balance sheet for Property, Plant & Equipment (PP&E), to account for the depreciation that has accumulated over the years that the company has owned the assets. Generally, most companies show PP&E on their balance sheet as a net amount, meaning: ( Total Book Value of Assets - Accumulated Amortization )
What decreases an asset account credt or debit?
Assets has debit balance as normal balance so debit balance increases it while credit balance decreases it.
