What are different causes of Depreciation?
Here are some of the reasons or causes of depreciation: Physical loss Any damaging change in the physical features of the asset or in the productivity, efficiency or effectiveness of the asset either because of the usage, perishability, or any mishap will result in the decrease in the value of asset and subsequent disposal will […]
What type of accounts are maintained under Purchases ledger?
i-ask! | Have a question? Ask Tutor! What type of accounts are maintained under Purchases ledger? What entries are posted in purchase ledger? Also what is the difference between purchases ledger and purchases account? First things first, we need to understand and be very clear that ledgers and accounts are two different things and are […]
What is the difference between Purchase ledger and Purchase account?
Quite a basic question in fact. A lot of students realize about these concepts as soon as they start studying Auditing especially when they have to apply different audit procedures where these basic concepts play pivitol role and thus we cannot escape them. To begin with, we need to clear one misconception that LEDGER is […]
What is french straight line method of depreciation?
French straight line depreciation method is not completely a new method to calculate depreciation. Rather it is more of a derivation or extended version of usual straight line method accounting students learn in depreciation topic. And many students learn french straight line method under the name of straight line method. But they are not completely the […]
What is ‘Declining balance to Straight line crossover’ method of depreciation?
Majority of the students studying accounting, either at initial stages or experienced in accountancy academics, are familiar with two of the most renowned depreciation methods used by entities to calculate depreciation expense for the period are straight-line and declining balance methods. One of the reason why these methods are so widely used is the fact that […]
What is meant by ‘net of’ in accounting or tax and other business related subjects?
The expression ‘net of’ represents the exclusion of something from a particular sum. For example net of tax means the resultant amount which is exclusive of tax or in other words the amount we get after deducting tax is net of tax amount. We can see its uses in wide variety of ways in accounting […]
How preparing statement of cash flows is different under IFRSs and GAAPs?
One of the key benefits of statement of cash flows or cash flow statement is its comparability. This is due to the fact that although we have difference accounting frameworks in the world even then cash flow statements are produced on almost the same basis. Definitely, there will be some differences if look deeper but […]
Which method is preferable to prepare Statement of Cash Flows?
International Accounting Standard (IAS) 7 Statement of Cash Flows give entity the choice to choose freely in selecting the method to prepare statement of cash flows. Moreover, IAS 7 does not bound entities or types of entities to follow a particular method for reporting cash flows during the period nor it mentions any set of […]
What transactions are adjusted in profit or loss to prepare statement of cash flows under indirect method?
Statement of Cash Flows or Cash Flow Statement can be prepared using two methods; direct method or indirect method. As under indirect method, income statement or statement of comprehensive income is used to determine cash flows from operating activities therefore, profit or loss figure requires some adjustments. These adjustments are made because entity is required […]
How a loan repayment is disclosed in statement of cash flows?
First things first, a loan can be repaid in number of ways for example in cash, by handing over certain asset or converting debt to shares etc. But if the repayment does not involve cash outflow then such transaction will not be disclosed in the statement of cash flows. A loan installment mostly has two […]
