## Disposal of assets and Exchange of asset entries

Disposal of assets meaning When the assets become obsolete due to change in technology or fashion or due to end of life. The assets should be disposed, which is the disposal of assets. While disposing of the assets there may be gain or loss or company may dispose of it at scrap value. The journal … Read more

## Units of production method (Production run method)

Definition of units of production method or Production run method The production run method is also known as units of production method or units of output method. Under this method, the depreciation rate is estimated based on the total estimated output. Then, annual depreciation is calculated to multiply the depreciation rate by units of production … Read more

## Double declining balance method | definition and example

Definition of double declining balance method of depreciation The double declining balance method of depreciation also called accelerated depreciation method. In this depreciation method first fall the straight-line depreciation rate is determined, just dividing the original cost by its life. It means the scrap value is ignored while calculating the rate of depreciation. The depreciation … Read more

## Reducing balance method or Declining balance method of depreciation

Definition of reducing balance method or Declining balance method of depreciation In this reducing balance method of depreciation, depreciation is charged on the assets based on the reduction value of the assets. A fixed percentage (%) of a depreciation rate is assigned on the reduced value of the assets. The depreciation value/ amount in the … Read more

## What is Straight Line Depreciation? Definition and Example

What is Straight Line Method of Depreciation? A straight-line method of depreciation requires a fixed amount of depreciation to be charged on the assets every year. This method is also called the original cost method, fixed installment method, equal installment method. The depreciation is calculated on the original cost of the assets. The original cost … Read more

## Acquisition cost – definition and example

Acquisition cost definition Generally the cost of invoice or payment made to the supplier for purchasing the asset considered as acquisition cost. In accounting, however, all the cost incurred to bring the assets in the business location and other expenditures which are incurred in order to set of the assets are also treated as acquisition … Read more

## Capital expenditure and Revenue expenditure | Differences and definition

Definition and difference between capital expenditure and revenue expenditure A business incurs several expenditures during the year some of them are recurring in nature whereas others are non-recurring in nature. The non-recurring expenditure and recurring expenditure respectively, are called capital expenditure and revenue expenditure. Capital expenditures are treated as assets whereas revenue expenditures are immediately … Read more