Help needed in accounting Asap please ?
Jim Yule runs a retail outlet and usually prepares the annual accounts himself on 31 July each year. He’s discovered you are studying accounting and has the following questions for you I’ve read that I should depreciate all my fixed assets: including the business premises. Why should I do this when they are going up in value?†Answer Jim’s questions, explaining in each case the entries required to the profit and loss account and the balance sheet, justifying the treatment in accordance with accounting principles
Other - Business & Finance - 2 Answers
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Answer 1 :
All assets depreciate as they get older. Even if they are going up in value, it is illegal to raise their value in the books. If you happen to sell your asset for more than the value you have it for on the books, you can mark the difference as profit. I'm a bit rusty. I don't remember everything from my accounting classes. Sorry. I know that the account for assets should stay at whatever you paid. Then a new account should be added for depreciation. then if you sell the asset, any profit or loss is marked in another account.
Answer 2 :
You have to depreciate assets, the depreciation is an expense in th P&L and then in the Bal Sheet you have to put in Fixed Assets as a title, underneath you need to state cost, the depreciation and then the NPV, you should consider mentioning SSAP 12 & FRS 15 which deals with the treatment of tangible fixed assets and depreciation of them. Also this is a great website to use http://www.accountingcoach.com/
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