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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.
Provision for depreciation is equal to accumulated depreciation?
yes
What is provision for depreciation and how do you treat it in accounts?
A provision of depreciation account is different than other accounts because it collects all of the value of depreciation within the account. In the main asset account, depreciation is not credited because it is credited into this account.
When a separate provision for depreciation account is in use then bookkeeping entries for the year's depreciation are?
When a separate provision for depreciation account is in use, the bookkeeping entries for the year's depreciation involve debiting the depreciation expense account and crediting the provision for depreciation account. This reflects the expense incurred for the period while simultaneously increasing the accumulated depreciation on the asset. This method allows for clearer tracking of depreciation over time without directly reducing the asset's book value until it is disposed of.
Is provision for depreciation is current liability?
NO, it is not a liability it is a con-tra account
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.
Provision for depreciation is equal to accumulated depreciation?
yes
Do you credit provision depreciation and debit accumulated depreciation?
yes
What is provision for depreciation and how do you treat it in accounts?
A provision of depreciation account is different than other accounts because it collects all of the value of depreciation within the account. In the main asset account, depreciation is not credited because it is credited into this account.
When a separate provision for depreciation account is in use then bookkeeping entries for the year's depreciation are?
When a separate provision for depreciation account is in use, the bookkeeping entries for the year's depreciation involve debiting the depreciation expense account and crediting the provision for depreciation account. This reflects the expense incurred for the period while simultaneously increasing the accumulated depreciation on the asset. This method allows for clearer tracking of depreciation over time without directly reducing the asset's book value until it is disposed of.
Is balance of provision for depreciation account is shown on the trial balance as debit?
no, provision of depreciation iscredit in nature. And thus it should be shown at the credit side at trial balance.
Is provision for depreciation is current liability?
NO, it is not a liability it is a con-tra account
Should Provision for depreciation comes under current liabilities?
All provisions comes under current liabilities so provision for depreciation is as well because it is made for one fiscal year only.
What are the examples of contra account?
Examples of Contra Accounts are Accumulated Depreciation and Provision for Doubtful Debts
What is profit before depreciation?
The answer is in the question really. It's the profit a business makes before depreciation is charged. As depreciation is a non cash item it could be argued that it's the cash profit. However, there could be provision in there so calling it the cash profit is not strictly true.
Why does the accumulated provision for depreciation has a credit balance?
Accumulated provision for depreciation has a credit balance because it represents the total amount of depreciation expense that has been allocated against an asset since its acquisition. This account acts as a contra asset account, reducing the book value of the related asset on the balance sheet. As depreciation is recorded over time, it increases the credit balance, reflecting the wear and tear or obsolescence of the asset. Thus, it offsets the asset's original cost, showing its reduced value.
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.
