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Why depreciation is charged in P&L Account?
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Answer Posted / rajesh
depreciation is to be privided by the company for using the
fixed assets. the concept fixed will be retained by the
company for manufacturing goods and prividing servies for a
period more than one year. during the usage it lost its
value in the form of wear and tear efflux of time and
technical changes and latest tech development in mfg
process. once the life is over it has to be replaced by
other equipment. the basic concept is business entity
concept that the business will be carried over more than
one year. for that purpose we are charging to p&l acccount.
by charging that amount treated it as exp.with out
incurring exp we are charging thaqt means the company
holding money in the form of cash. and for purchasing new
eqipment
| Is This Answer Correct ? | 2 Yes | 2 No |
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(a) Rajesh Ltd. gives you the following information for the year ended 31st March, 2006: (i) Sales for the year Rs. 48, 00, 000. The Company sold goods for cash only. (ii) Cost of goods sold was 75% of sales. (iii) Closing inventory was higher than opening inventory by Rs.50,000. (iv) Trade creditors on 31.3.2006 exceed the outstanding on 31-3.2005 by Rs. 1, 00, 000. (v) Tax paid during the year amounts to Rs. 1, 50, 000. (vi) Amounts paid to Trade creditors during the year Rs. 35, 50, 000. (vii) Administrative and Selling expenses paid Rs. 3, 60, 000. (viii)One new machinery was acquired in December, 2005 for Rs. 6, 00, 000. (ix)Dividend paid during the year Rs. 1,20, 000. (x)Cash in hand and at Bank on 31.3.2006 Rs. 70, 000. (xi) Cash in hand and at Bank on 1. 4.2005 Rs. 50, 000. Prepare Cash Flow Statement for the year ended 31.3.2006 as per the prescribed Accounting Standard. (b) Define the teen "Operating Activities", "Investment Activities" and "Financing Activities" as per NA S-3 Send me this question answer in my mail Address please help me to how solve the question ( deepakgaire@gmail.com) plese plese
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