Accounting Entries Related To Assets And Depreciation Homework Help
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Assets are the terms used for any valuable entity f affirm whose values will rise with respect to time. An asset for a firm can be categorized by its shares, stocks, etc. At the end of a financial year all the assets and liabilities are to be stated in the balance sheet. Such balance sheets are nothing but representations of accounting aspects for a financial year. These balance sheets are helpful in deciding financial statement of the year and the management takes financial decisions for the firm. In our accounting entries related to assets and depreciation homework help team we have experts from all around the world who can help students in the field of commerce and accounts with their assignments and homework on the same.
Various entities of the firm including buildings, machineries, tools and fixtures, parking lots etc. are considered under asset if they last more than one year. But they are not supposed to last forever. During a quarterly or half yearly of yearly financial period, these assets are used and their value is supposed to be depreciated. The used portion is termed as depreciation expense and listed in the income statement. In our accounting entries related to assets and depreciation homework help students can clearly find the differences between assets, liabilities and depreciation values. This asset’s cost transfer from balance sheet to income statement is known as depreciation values.
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Calculation and reporting of depreciation
As our accounting entries related to assets and depreciation homework help experts suggest, there are two accounting principles on which this is based. They are
i. Cost principle: According to this principle the value of assets noted on the balance sheet and the value of depreciation reported on the income statement should be based on historical cost of the asset. The current market value of the asset is to be ignored at the time of calculating.
ii. Matching principle: The asset’s cost is allocated to depreciation expenses over the life of asset as per this principle. A portion of asset’s cost used is matched with each time the asset is used and a report is made by the accountant. This is done by allocating the various asset cost to income statements.
Need of accounting entries related to assets and depreciation
A journal entry for depreciation includes a debit to the income statement account and credit to the balance sheet account as explained. A matching principle achievement is considered to be the foremost goal of these journal entries. The portions of the assets used are going to be matched with the revenue generated with these assets. Although revenues are not directly attached to the fixed asset, still they are the major part of the production.
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