Download File (1).pdf - Question(1 Answer:If you are...

This preview shows 1 out of 2 pages.

Question (1) Answer:- If you are appointed as an accountant for a new organization that is preparing its first set of financial statements then some basic information for determining depreciation will be required. That information may be as follow. 1)Assets and their types For determining depreciation on the assets of a new organization, first of all we must know the available assets in that organization because unless we do not have idea about the available assets then we can not charge depreciation on those assets. Apart from this we also should know about the category of those assets because different assets have different rules for charging depreciation. 2) Cost or purchase price of assets Depreciation is charged on the cost and purchased price hence we will need cost price & purchased price of each and every assets otherwise depreciation can not be determined. 3) Salvage value of assets Salvage value refers to the residual value (sale value) of an asset after passage of useful life. This salvage value need to be deducted from cost of the assets for calculating correct amount of depreciation hence information about salvage value must be given. 4) Useful life of assets Useful life refers to time for which an asset can be used. Depreciation is determined on the basis of useful life of an asset because useful life helps in allocating the cost of an asset. Thus information about useful life must be there. 5) Methods of depreciation to be followed For an accountant it is necessary to have clear idea about the method of depreciation to be used because every methods of depreciation have its own merits and demerits. Apart from this one method can be approved by the
Image of page 1

Subscribe to view the full document.

Image of page 2
You've reached the end of this preview.
  • '16
  • John Wilberforce
  • Depreciation, Accountant, Generally Accepted Accounting Principles, useful life

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern