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You can post the question you're feeling difficulty in, I'd try my best to answer.And excellent notes on the 3rd unit of economics government failure
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You can post the question you're feeling difficulty in, I'd try my best to answer.And excellent notes on the 3rd unit of economics government failure
Depreciation is the fall in value of a non-current asset due to;A detailed explanation of Depreciation
do you have a link to ur question?Can any of ull explin hw to find bad debts in a non profit organisation
Depreciation refers to the fall in the value of a non current asset over the period of its useful life. It is recorded as an expense in the income statement. Its normal or opening balance is on the credit side since it reduces an asset. It is measured using 3 main methods i.e. Straight line, Reducing/Diminishing balance, and Revaluation method.A detailed explanation of Depreciation
Just apply the percentage of bad debts on total trade receivables e.g. 2% of debtors if this is the case otherwise it may also be given in the question which u may only have to include in the incomes and expenditures account.Can any of ull explin hw to find bad debts in a non profit organisation
If u want to understand dep. in detail first, u should understand revenue and capital expenditures. Revenue expenditures are expenditures within an accounting period and are written off in Income Statement ( Statement of Financial Performance ) whereas Capital expenditure are for more than one accounting period and are written in Balance sheet ( Statement of Financial Position). Now when u purchase Non-current asset i-e a capital expenditure because it can be used for more than one accounting period so it goes to Balance sheet. (SOFP), now suppose u purchased building in 2010 which has cost of 100,000 and life of 5 years, now this building will be written in Balance sheet(SOFP) because it can be used for more than one accounting period, now after one accounting period when u hav used it for that accounting period, part of that capital expenditure will be converted into revenue expenditure as u used it for 1 accounting period, that accounting period for which u hav taken up benefit will be considered as revenue expenditure and u will write that in Income statement as an depreciation. (100,000/5 = 20,000) .... this 20,000 is conversion of capital expenditure into revenue exp. as u used building for that period.. now in balance sheet the net book value of that asset will be 80,000 (100,000 - 20,000). After 2nd accounting period u will again convert capital expenditure into revenue exp. So again (100,000/5 = 20,000)this 20,000 will go to I/S as dep. n in B/s u will write Building as (100,000 - 40,000 = 60,000)...u can use diff. methods for converting cap. exp into revenue exp.... which are called methods of dep. ...... hope u understand ...... if u hav an doubt u can ask againA detailed explanation of Depreciation
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