Preparing an accounting record?
For my accounting degree we have to look at a balance sheet and then use the information included to produce an accounting record, re adjusting the values for certain calculations that have not been included. When you start the accounting record you put all the ordinal values at the top however normally there is just one figure however because we have the balance sheet, i have 3 pieces of information of land and building, cost, depreciation and net book value, which value would i use as my starting point? Thanks for any help
Other - Business & Finance - 3 Answers
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Answer 1 :
Net Income, maybe? I don't know if that helps, but hopefully it does.
Answer 2 :
The single fixed assets figure you refer to on a balance sheet is the net book value. When you have all three figures you can show them all but for ltd co.'s the NBV is shown on its own with notes showing the cost price and the total depreciation to date.
Answer 3 :
Were you given a template? It depends. You don't adjust cost in your adjusting entries, which would probably be just: Dr Depreciation expense xxx Cr Accumulated depn xxx so if your template has nbv as cost less accd depn, then you only need to adjust the accd depn amt and the nbv would automatically be recalculated, with the depn expense amt being taken to the income statement.
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