Depreciation on current assets Depreciation is not charged on current assets because they are not expected to last for more than one year and are not considered long-term assets. Current assets include items like inventory, accounts receivable, and prepaid expense. Which can expect to use up or sell within a short period of time. As… Read More »
Is depreciation the loss of the value of fixed assets Depreciation loss value of fixed assets refers to the process of distributing the cost of a fixed asset over its useful life. It is not technically a loss of value, but rather an accounting method to allocate the cost of an asset over the period… Read More »
Is depreciation a current liabilities No, Depreciation is a technique in accounting that spreads the cost of a tangible asset across its useful lifespan. It represents the wear and tear, usage, or obsolescence of the asset over time. For more information to visit: https://www.incometax.gov.in Here are the key points to understand about depreciation and its… Read More »
Prepaid Expenses It is considered as personal accounts in accounting because they represent an advance payment made by the business for goods or services. It will receive in the future. Personal accounts are those accounts that deal with individuals, firms or entities. That either indebts to the business or have lent money to the business.… Read More »
Cash book and ledger Website link A cash book and ledger are both important accounting tools used to keep track of financial transactions, but they serve different purposes. A cash book is a record of all cash transactions that occur within a business, including cash inflows and outflows. It is used to record and reconcile… Read More »
Why is provision for depreciation not an expense Provision for depreciation is not considered as an expense but rather as a gradual reduction in the value of an asset over its useful life. Unlike immediate expensing, depreciation allows for the allocation of an asset’s cost over time. To visit- https://www.mca.gov.in/ Depreciation represents the decrease in… Read More »
Debit expenses and Credit revenues In accounting, we debit expenses and credit revenues because it follows the principle of double-entry bookkeeping. This principle states that every financial transaction has two equal and opposite effects: a debit entry and a credit entry. To visit- https://www.mca.gov.in/ Expenses always come in debit because they represent a decrease in… Read More »