Anyone know anything about accountancy? - HotUKDeals
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Anyone know anything about accountancy?

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Question for you - If I'm reporting for a quarter and I bought a long term asset at the beginning of the quarter for £5000 and the depreciation was £1000 at the end of the quarter. Would I put …
reddiamonds Avatar
8y, 4w agoPosted 8 years, 4 weeks ago
Question for you -


If I'm reporting for a quarter and I bought a long term asset at the beginning of the quarter for £5000 and the depreciation was £1000 at the end of the quarter.
Would I put down in the income statement that the expense was £1000 for the asset?
And the balance sheet would show £4000 for the asset?

Or does the balance sheet show the full amount of the asset but the income only get charged the depreciation in the period?

Thank you :)
reddiamonds Avatar
8y, 4w agoPosted 8 years, 4 weeks ago
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#1
the balance sheet should show full amount as to tie up with actual account
#2
The balance should have assets worth £4000 and in the income statement or profit and loss as it is also known would show a depreciation of £1000.

in your accounts somewhere it would show asset cost of £5000 and accumulated depreciation of £1000 making the asset value of £4000

however if you keep depreciating the asset in that way you will only have a long term asset worth 1k which cost you 5k after one year........
#3
thank you, and the depreciation goes as a charge for the period?
#4
yeah its written off as a charge in the profit and loss but added back for any tax calculations......
#5
andymack
yeah its written off as a charge in the profit and loss but added back for any tax calculations......



You are a star, thank you so much.. :thumbsup:
#6
no worries :)

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