All posts by Sneha Agarwal - 3. page

Professional Tax Consultant and Article Writer

Entries for sale of asset : When the following entries are made: 1. Entry for sale Bank A/c                   ….     […]

Recording Depreciation : Depreciation is directly charged against the asset by debiting Depreciation account and crediting the Asset account. Depreciation account is closed by transferring to Profit and Loss account […]

Revaluation Method: Under this method, the assets like loose tools are revalued at the end of the accounting period and the same is compared with the value of the asset […]

Insurance Policy Method : According to this method, an Insurance policy is taken for the amount of the asset to be replaced. The amount of the policy is such that […]

Depreciation Fund Method or Sinking Fund Method : Under this method, funds are made available for the replacement of asset at the end of its useful life. The depreciation remains […]

Annuity Method: The annuity method considers that the business besides loosing the original cost of the asset in terms of depreciation and also looses interest on the amount used for buying […]

Demerits of Written Down Value Method : It is very difficult to determine the rate by which the value of asset could be written down to zero.

Merits of Written Down Value Method : 1. Uniform effect on the Profit and Loss account of different years: The total charge (i.e., depreciation plus repairs and renewals) remains almost […]

Demerits of Straight Line Method : The amount of depreciation is same in all the years, although the usefulness of the machine to the business is more in the initial […]

Merits of Straight Line Method : 1. Simplicity: It is very simple and easy to understand. 2. Easy to calculate: It is easy to calculate the amount and rate of depreciation. […]