Pro-rata depreciation is used when an asset is purchased in the middle of an accouting period therefore the straight line method and reducing balnce methods can not be used. The pro rata method lets you define howw long the asswet has been in ownership by the business for.
In means 'in proportion'. For example, if money is given out pro rata, every one gets an equal share
Depreciation is the method of allocation of part of cost to all fiscal years to which fixed asset is used for revenue generation to income statement
Yes. Accumulated depreciation is a contra asset account, which means it has an opposite balance from a normal asset account. It is used to reduce the balance whatever asset you are deprecating. When you total your assets on the balance sheet, you deduct the cost of Accumulated depreciation from your assets to get the true worth of your assets.
the expired cost of fixed plant assets such as land, building, equipment, furniture and fixtures and automobile etc.., after a year is known as depreciation. it means that if you depreciate the value of any fixed assets you will be able to estimate its life for the future use..it can help you to estimate the total revenue earned by using that assets.
A sales refund will reduce income (debit to Sales Returns) and assets (credit to cash).A debit to Depreciation Expense and a credit to Accumulated Depreciation will reduce assets and net income.It means that some transaction decreases assets and liabilities at the same time. For example, payment of accounts payable results in a decrease in cash and a decrease in accounts payable.
Prudence concept tends to understate the profit . depreciation is a tool through which we record our losses , which means that our profit is declining .This means that depreciation is a supportive tool for reducing profit. Matching concept tends to record the expense to the revenue generated from the assets . Hence depreciation fulfils the requirements of both the concepts .
I think you meant to ask what is depreciation. This is the value given to the wearing out of assets in accounting term. When you buy an asset like a Car the value of it will always go down as you use it. In Accounting this is called depreciation and you have to provide for it when doing the accounts.
Fully funded depreciation means setting aside enough money or assets to cover the depreciation of an asset over its useful life. By fully funding depreciation, a company ensures it will have sufficient resources to replace the asset when it reaches the end of its useful life without incurring a financial burden.
I think you meant to ask what is depreciation. This is the value given to the wearing out of assets in accounting term. When you buy an asset like a Car the value of it will always go down as you use it. In Accounting this is called depreciation and you have to provide for it when doing the accounts.
Depreciation means the reduction price of the fixed assets by consumption. It is an expense for business. In layman's terms, as regards the depreciation of a car, for instance, depreciation occurs when something loses value over time.
The equilibrium in the business means that the company's after tax profit is at satisfactory level, rate of non performance assets is low, adequate depreciation has been provided for all assets of the company. Over and above, there is huge prospect for future growth of the company.
Accelerated depreciation allows a company to take a higher upfront depreciation expense. Higher depreciation means a lower profit, and lower taxes to pay.