A
site accquired for the purpose of extracting or removing some valueable
resource such as oil, minerals, or timber is classified as natural resources.
The term Depletion is used like depreciation for natural resources.
Saturday, November 30, 2013
Wednesday, November 20, 2013
Depreciation
The
process of allocating the cost of fixed asset over its estimated useful life is
called depreciation.
Buildings, machinery, equipment, furniture, fixtures, computers, outside lighting, parking heaps, cars, and trucks ar samples of assets which will last for quite one year, however won't last indefinitely. throughout every accounting amount (year, quarter, month, etc.) some of the value of those assets is getting used up. The portion getting used up is reportable as Depreciation Expense on the statement. In impact depreciation is that the transfer of some of the asset's price from the record to the statement throughout every year of the asset's life.
The calculation and coverage of depreciation is predicated upon 2 accounting principles:
price principle. This principle needs that the Depreciation Expense reportable on the statement, and therefore the quality quantity that's reportable on the record, ought to be supported the historical (original) price of the quality. (The amounts mustn't be supported the value to switch the quality, or on this value of the quality, etc.)
Matching principle. This principle needs that the quality's price be allotted to Depreciation Expense over the lifetime of the asset. In impact the value of the quality is split up with a number of the value being reportable on every of the financial gain statements issued throughout the lifetime of the quality. By assignment some of the asset's price to numerous financial gain statements, the businessperson is matching some of the quality's price with every amount within which the asset is employed. Hopefully this conjointly implies that the quality's price is being matched with the revenues attained by mistreatment the asset.
There ar many depreciation ways allowed for achieving the matching principle. The depreciation ways may be sorted into 2 categories: straight-line depreciation and accelerated depreciation.
The assets mentioned on top of ar typically stated as mounted assets, plant assets, depreciable assets, made assets, and property, plant and instrumentality. it's necessary to notice that the quality land isn't depreciated, as a result of land is assumed to last indefinitely.
The calculation and coverage of depreciation is predicated upon 2 accounting principles:
price principle. This principle needs that the Depreciation Expense reportable on the statement, and therefore the quality quantity that's reportable on the record, ought to be supported the historical (original) price of the quality. (The amounts mustn't be supported the value to switch the quality, or on this value of the quality, etc.)
Matching principle. This principle needs that the quality's price be allotted to Depreciation Expense over the lifetime of the asset. In impact the value of the quality is split up with a number of the value being reportable on every of the financial gain statements issued throughout the lifetime of the quality. By assignment some of the asset's price to numerous financial gain statements, the businessperson is matching some of the quality's price with every amount within which the asset is employed. Hopefully this conjointly implies that the quality's price is being matched with the revenues attained by mistreatment the asset.
There ar many depreciation ways allowed for achieving the matching principle. The depreciation ways may be sorted into 2 categories: straight-line depreciation and accelerated depreciation.
The assets mentioned on top of ar typically stated as mounted assets, plant assets, depreciable assets, made assets, and property, plant and instrumentality. it's necessary to notice that the quality land isn't depreciated, as a result of land is assumed to last indefinitely.
Wednesday, November 13, 2013
Loading /Surplus
The
difference between cost price and invoice price of goods sent of consignment is
called loading.
Friday, November 8, 2013
Depreciation
The
process of allocating the cost of fixed asset over its estimated useful life is
called depreciation.
The major causes of depreciation area unit as follows:
1. Wear And Tear wear and tear discuss with a decline within the efficiency of plus owing to its constant use. once an asset losses its efficiency, its worth goes down and depreciation arises. this is often true just in case of tangible assets like plant and machinery, building, furniture, tools and equipment utilized in the plant.
2. Effusion of your time the worth of asset might decrease due to the passage of your time though it's not in use. There area unit some intangible fixed assets like copyright, patent right, and lease hold premises that decrease its value as time elapse.
3. Exhaustion an asset might loss its value due to exhaustion too. this is often the case with wasting assets like mines, quarries, oil-wells and forest-stand. On account of continuous extraction, a stage can return wherever mines and oil-wells get fully exhausted.
4. obsolescence Changes in fashion area unit external factors that area unit responsible for throwing out of assets though those are in physical fitness. for instance black and white televisions became obsolete with the introduction of color TVs, the users have discarded black and white TVs though they're in good condition. like loss on account of recent invention or modified fashions is termed as obsolescence.
1. Wear And Tear wear and tear discuss with a decline within the efficiency of plus owing to its constant use. once an asset losses its efficiency, its worth goes down and depreciation arises. this is often true just in case of tangible assets like plant and machinery, building, furniture, tools and equipment utilized in the plant.
2. Effusion of your time the worth of asset might decrease due to the passage of your time though it's not in use. There area unit some intangible fixed assets like copyright, patent right, and lease hold premises that decrease its value as time elapse.
3. Exhaustion an asset might loss its value due to exhaustion too. this is often the case with wasting assets like mines, quarries, oil-wells and forest-stand. On account of continuous extraction, a stage can return wherever mines and oil-wells get fully exhausted.
4. obsolescence Changes in fashion area unit external factors that area unit responsible for throwing out of assets though those are in physical fitness. for instance black and white televisions became obsolete with the introduction of color TVs, the users have discarded black and white TVs though they're in good condition. like loss on account of recent invention or modified fashions is termed as obsolescence.
Wednesday, November 6, 2013
Value of unsold stock
Value
of unsold stock = cost price of closing stock + Proportionate of non-Recurring
expenses (consignor & Consignee)
Value
of unsold stock = = (Cost of goods sold+Proportionate of all expenses/Total Quantity) X unsold stock
Tuesday, November 5, 2013
Performa Invoice
A
statement which is sent by consignor to consignee with details about quality,
quantity and price to guiding the consignee for sale of goods is called Performa
invoice.
A pro forma document is provided prior to of AN actual dealing. Such a document is a model for the particular documents of the dealing. for instance, once a replacement corporation is visualised, its founders might prepare a business arrange containing professional forma monetary statements, like projected money flows and financial gain statements.
In Foreign trade transactions, a professional forma (or proforma) invoice may be a document that states a commitment from the vendor to order some merchandise to be oversubscribed to an exact person, the buyer. the client places AN order and if the vendor agrees, it extend a proforma invoice; once the client receives this invoice and agrees to any or all the terms laid out in it, the products square measure sent and also the proforma is replaced by an advertisement invoice (the definitive document). A proforma invoice does not establish any obligation of transfering cash from the client to the vendor.
In Foreign trade transactions, a professional forma (or proforma) invoice may be a document that states a commitment from the vendor to order some merchandise to be oversubscribed to an exact person, the buyer. the client places AN order and if the vendor agrees, it extend a proforma invoice; once the client receives this invoice and agrees to any or all the terms laid out in it, the products square measure sent and also the proforma is replaced by an advertisement invoice (the definitive document). A proforma invoice does not establish any obligation of transfering cash from the client to the vendor.
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