Basically there are two bookkeeping rules or principles of charging depreciation into the books of the accounts: BOOKKEEPING DOUBLE ENTRY RULES/PRINCIPLES OF CHARGING DEPRECIATION: YEARLY method:- Full year depreciation should be charged in the year of purchase and NO depreciation should be charged in the year of sale, irrespective whether the asset was used for [...]
At certain point of time, the company would want to dispose of some of its fixed assets either payable in cash or agree with the vendor to offset against the new fixed assets. Hence, the bookkeeper needs to understand how to treat these situation(s):-
Sometimes, some bookkeepers might not appreciate keeping the fixed asset register. Some might consider it as superfluous or too tedious. But maintaining a fixed asset register has many good advantages.
Continue reading about What Is The Purpose Of A Fixed Asset Register?
Basically, there are three (3) methods of doing computing depreciation for assets bought or sold during an accounting period:
The basic step before learning to understand the accounting treatment of depreciation is to ask ourselves what really is depreciation and what is the fuss of creating such a charge into the Income Statement.
Continue reading about What Is Depreciation And Why Do We Need Depreciation?
For bookkeeping, we need to account for depreciation other the accounting profit would be distorted. We know that there are a few methods of accounting for depreciation, however the basic points we always need to consider are the following:
Below article relates to how to record depreciation. Basically, there are two (2) ways of recording depreciation:
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