Bayt.com

Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

For a acquisition of fixed asset will be capitalized , through the amount of annual depreciation shall be debited to profit & loss account why ?

1.Revenue Expenditure2.Capital Expenditure3.Indirect Expenses4.Direct Expenses5.All of the above.

Financial Reporting Financial Accounting Financial Analysis
user-image
Question added by Dasarathi Rath , Sr. Accountant , Al Luban Special Investment LLC
Date Posted: 2014/02/27
Upvote (1) Views (4) Followers (1) Answers (2) Report Question
Write an Answer
Register now or log in to answer.
Mahmoud El-Naggar
by Mahmoud El-Naggar , Senior Auditor , Hassan El-Serafi & Shafiq Ahmed Chartered Accountants

As the fixed asset will serve more than one year and generate revenue s for every coming year

Humza Shahid
by Humza Shahid , Finance Support officer , Akzonobel Pakistan (Formerly ICI Paints)

because when the business buy an asset its assume that it generate the revenue and there is some cost to generate the revenue if the depreciation wll not record in income statment then income will be overstated

 

Write Your Answer
More Questions Like This

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.

Get Help