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 …
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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 …
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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 …
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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 …
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Definition of straight line depreciation A straight line method of depreciation requires a fixed amount of depreciation to be charged on the assets every year. This method also called original cost method, fixed installment method, equal installment method. The depreciation is calculated on the original cost of the assets. The original cost is the acquisition …
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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 …
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 called capital expenditure and revenue expenditure. The capital expenditures treated as asset whereas revenue expenditures immediately treated as …
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notes payable journal entries Financial accounting-ii Receivables Pokhara University (PU) 2017 Fall Q. No. 15 Civil Company issued 9 months promissory note on 1st November, 2015 for cash. The interest rate on the note was 12% p.a. The amount of note was Rs. 100,000. Required: Prepare all necessary journal entries on issue, year end and …
Aging account receivable method Financial Accounting-ii – Receivables Pokhara University (PU) 2017 Fall Q. No. 13 Apple Company distributes Cell phones. It sells on credit to retail shops and extents term of 2/5/ net 60. For accounts that are not overdue, Apple has found that 98% probability of collection. For accounts up to one month …
Notes payable journal entry Financial Accounting-ii – Receivable Pokhara University (PU) 2016 Spring Q. No. 15 On magh 1, 2072 Pokhara Trading House borrowed Rs. 10,00,000 from the Nepal Investment Bank. This House signed a 6 month, 9% promissory note for the entire amount. It uses a calendar year end. Required: What adjustments would be …