The following journal entries are recorded under this method
Chapter 7: Depreciation, Provisions and Reserves · ACCOUNTANCY · EN medium
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. For recording purchase of asset (only in the year of purchase) Asset A/c (with the cost of asset including installation, expenses etc.) To Bank/Vendor A/c (cash/credit purchase) . Following two journal entries are recorded at the end of each year: (a) For crediting depreciation amount to provision for depreciation account Depreciation A/c (with the amount of depreciation) To Provision for depreciation A/c (b) For charging depreciation to profit and loss account
📖 Accounts 7 (1) · Page 17
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. For recording purchase of asset (only in the year of purchase) Asset A/c (with the cost of asset including installation, expenses etc.) To Bank/Vendor A/c (cash/credit purchase) . Following two journal entries are recorded at the end of each year: (a) For crediting depreciation amount to provision for depreciation account Depreciation A/c (with the amount of depreciation) To Provision for depreciation A/c (b) For charging depreciation to profit and loss account
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