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Accumulated depreciation which is not shown in income and expenditure account as expenditure and the same is included in the net profit and shown separately as depreciation reserved fund while adding it in the capital fund.

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What was the Reserve Fund?

The Reserve Fund was the first money market mutual fund


What is the purpose of a reserve for depreciation and depletion?

To preserve the corpus for the remainder beneficiaries


Definition of sinking fund method?

Sinking fund method is a method of depreciation if a large sum of money is required for replacement of an asset at the end of its effective life it may not be advisable to leave in the amount of depreciation set apart annually, for it may or may not be available in the form of the readily realisable assets to the concern at the time it is required. To safegaurd this position the amount annually provided for depreciation may be placed to the credit of the sinking fund account


How do you calculate depreciation using sinking fund?

To calculate depreciation using a sinking fund, first determine the asset's cost, its useful life, and the expected salvage value at the end of its life. You then calculate the annual sinking fund deposit required to accumulate the salvage value, using the formula: [ S = \frac{P}{(1 + r)^n - 1} ] where ( S ) is the sinking fund deposit, ( P ) is the salvage value, ( r ) is the interest rate, and ( n ) is the number of years. The annual depreciation expense is then equal to the sinking fund deposit, reflecting how much should be set aside each year to replace the asset at the end of its useful life.


3 Upon closing the books at year-end a government should a. Debit fund balance and credit reserve for encumbrances c. Debit fund balance and credit encumbrances.?

Debit fund balance and credit encumrances because the reserve for encumbrances need not be closed because it is a balance sheet account.

Related Questions

What is reserve depreciation?

Accumulated depreciation which is not shown in income and expenditure account as expenditure and the same is included in the net profit and shown separately as depreciation reserved fund while adding it in the capital fund.


What was the Reserve Fund?

The Reserve Fund was the first money market mutual fund


When was the Reserve Fund created?

The Reserve Fund was created in 1971


Was the Reserve Fund the first money market mutual fund?

The Reserve Fund was the first money market mutual fund


Sinking fund method for depreciation?

Sinking fund method for depreciation The straight line method has equal annual depreciation for every year. There are other methods which has more depreciation allocated to the earlier years like Written-Down Value (WDV) method in which depreciation is charged at fixed rate (%) on the reducing balance (i.e. cost less depreciation) every year. The sinking fund method allocates more depreciation to the later years. The depreciation for the first year equals the annual deposit needed for a sinking fund to accumulate at the given rate to an amount that equals the depreciation base. For each consecutive year, the annual depreciation equals the annual sinking fund deposit plus the interest earned on the fund up to that year.


Which also treated as Depreciation fund?

No FLow


When was Revenue Equalization Reserve Fund created?

Revenue Equalization Reserve Fund was created in 1956.


When was State General Reserve Fund created?

State General Reserve Fund was created in 1980.


Can investment depreciation reserve be considered as free reserve to compute as tier you or tier ii capital?

Investment deportation reserve not considered as free reserve


Is it necessary to provide depreciation in the business running in loses?

it is necessary to provide depreciation even business is running in loses or in profit because depreciation provides fund for future and remove the burden of fund for purchasing new machinery when old machinery are broken down.


What is the purpose of a reserve for depreciation and depletion?

To preserve the corpus for the remainder beneficiaries


What is the purpose of a reserve for depreciation or depletion?

to preserve the corpus for the remainder beneficiaries