Archive about 'Depreciation & Provision'

WHAT IS THE DIFFERENCE BETWEEN THE TERM AMORTIZE AND DEPRECIATE

Question: Sometimes, we are confused by the term amortize and depreciate. Some even say that they are the same as both terms are used in depreciation accounting. Answer: Similarities of amortization and depreciation: Both amortization and depreciation are alike in the sense that the non-current assets are been expensed/write off systematically to the Income Statement [...]

How To Select The Most Appropriate Depreciation Method

I just join a newly set up company. Now I need to choose a depreciation method whether it should be on a straight-line basis(SL), unit of production basis, declining/reducing balance basis or sum of digit (SD) methods? So how do I go about doing it? Answer: Based on your Capital Budget you should able to [...]

What Are Intangible Assets And How to Record them

My company owns some patents and trademarks. What type of assets are they and how do I treat them? Assets that have no physical substance like patents, trademarks, copyrights, franchise, trade names are called Intangible Assets. Certain salient points need to be noted: The cost recorded is NOT the value of the intangible assets. Such [...]

Answers to True Or False Questions On Depreciation Of Fixed Assets

Append below the answer on True Or False on questions on depreciation:    ACCOUNTING FOR DEPRECIATION AND FIXED ASSETS True False 1. Depreciation is a non-cash item X   2. Depreciation is calculated generally on the market value of fixed assets   X 3. Depreciation should be provided only where the company can show some [...]

True Or False Question (With Answers) On Depreciation Of Fixed Assets

Append below the following true or false questions ( with answers) on depreciation:    ACCOUNTING FOR DEPRECIATION AND FIXED ASSETS True False 1. Depreciation is a non-cash item     2. Depreciation is calculated generally on the market value of fixed assets     3. Depreciation should be provided only where the company can show [...]

Listing Of Topics Under Depreciation Of Fixed Assets

Append below a listing of topics covered under the heading Depreciation Of Fixed Assets Content Page 1.0 What is Depreciation  and the reasons to provide for depreciation 2.0   Methods Of Accounting for Depreciation –using Straight line basis, Reducing balance and Sum Of Digit method (Part 1of 2) Methods of Account for Depreciation-using Revaluation method, [...]

Answers To Questions On Financial Mathematic On Depreciation

Append below the answers to questions on Financial Mathematic on depreciation based on straight line and reducing balance basis: FINANCIAL MATHEMATICS ANSWERS ON DEPRECIATION 1. $3,600 2. $2,375 3. (a) 32.55% (b) $2,415.34 4. (a) $131.53 (b) $304.83 5. 35.56% 6. (a) 15% (b) 24.21% CLICK HERE FOR ALL ARTICLES ON DEPRECIATION OF FIXED ASSETS

Questions On Depreciation Of Fixed Asset

Some questions for readers to practise on topic on depreciation of fixed assets based on straight-line basis and reducing or diminishing balance method:- FINANCIAL MATHEMATICS QUESTIONS ON DEPRECIATION 1 A firm bought a machine for $20,000 which is expected to be used for 5 years and then sold for $2,000. What is the annual amount [...]

Fixed Asset Register

What is the purpose of maintaining a  Fixed Asset Register? By maintaining a proper Fixed Asset Register, it allows a company to keep track of details of each fixed asset, ensuring control and preventing misappropriation of assets It also keeps track of the correct value of assets, which allows for computation of depreciation and for [...]

Accounting Test Question DEP No. 1 On Depreciation Of Fixed Assets

Accounting Test Question DEP No 1: Question: Johnson & Co, a building and construction firm, commenced trading on 1 January Year 6. During the three years to 31 December Year 8, the company bought and sold motor vehicles for use in the business as follows: Date Registration No Cost  ($) Date Of Disposal Disposal Proceeds [...]