Insurance Policy Method of Calculating Depreciation
Insurance Policy Method of Calculating Depreciation According to this method, Insurance policy is taken for the amount of the asset to be replaced. The amount…
Accounting
Why contra accounts are used?
A contra account offsets another, the related account with which it is paired. If the related account is an asset account, then the contra asset…
What are the types of lease?
Types of leases are discussed below Financial Lease This type of lease which is for a long period provides for the use of asset during…
What is lease?
A legal document outlining the terms under which one party agrees to rent property from another party. A lease guarantees the lessee (the renter) use…
What is included in conceptual framework in Financial Accounting?
A conceptual framework establishes the concepts that underlie financial reporting. A conceptual framework is a coherent system of concepts that flow from an objective. The…
How should a compensating balance be reported?
Compensating balance A minimum balance that must be maintained in an account. The compensating balance is often used to offset a portion of the cost…
Current liability and contingent liability
A current liability is susceptible to precise measurement because the date of payment, the payee, arid the amount of cash needed to discharge the obligation…
Sinking Fund Method for Calculating Depreciation
Depreciation Fund Method or Sinking Fund Method for Calculating Depreciation Under this method, funds are made available for the replacement of asset at the end…
Annuity Method for Calculating Depreciation
Annuity Method for Calculating Depreciation The annuity method considers that the business besides loosing the original cost of the asset in terms of depreciation and…
Depreciation Calculation
Depreciation is the process of allocating the cost of an asset over its life rather than all at once with regard to tax deductions and…
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