Accounting Principle

Depreciation Fund Method or Sinking Fund Method for Calculating Depreciation Under this method, funds are made available for the replacement of asset at the end…

Annuity Method for Calculating Depreciation The annuity method considers that the business besides loosing the original cost of the asset in terms of depreciation and…

Depreciation is the process of allocating the cost of an asset over its life rather than all at once with regard to tax deductions and…

The factors relevant in determining the annual depreciation for a depreciating asset are the initially recorded amount (cost), estimated salvage value, estimated useful life, and…

The four categories of plant assets are buildings, equipment, land and improvements. The things we want to discuss are which assets fall into each category and…

The following basic assumptions underlie the financial accounting structure: Economic entity assumption The economic entity assumption means that economic activity can be identified with a…

Diminishing Balance Method or Reducing Balance Method for Calculating Depreciation Depreciation is a decrease in the price of an asset with the course of time,…

Straight Line Method or Fixed Installment Method for Calculating Depreciation Depreciation is a decrease in the price of an asset with the course of time,…

Depreciation is a decrease in the price of an asset with the course of time, due in particular to wear and tear. All assets whose…

A bank reconciliation is a process performed by a company to ensure that the company’s records (check register, general ledger account, balance sheet, etc.) are…