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    Anyone know anything about accountancy?

    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

    6 Comments

    the balance sheet should show full amount as to tie up with actual account

    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........

    Original Poster

    thank you, and the depreciation goes as a charge for the period?

    yeah its written off as a charge in the profit and loss but added back for any tax calculations......

    Original Poster

    andymack;4220503

    yeah its written off as a charge in the profit and loss but added back … 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:

    no worries
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