Capital Improvements After Asset Acquisition

Accounting distinguishes between capital improvements and repairs and maintenance to an asset. A capital improvement is treated as a capital cost and included on the balance sheet of the business, whereas repairs and maintenance are treated as expenses and included in the income statement for the year.

Capital Improvements After Asset Acquisition June 14th, 2017Team
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Capital and Revenue Expenditure

Capital expenditures and revenue expenditures are treated differently in accounting. Capital expenditure relates to expenditure on non-current assets, whereas revenue expenditure is expenditure relating to the day to day trading activities of the business.

Capital and Revenue Expenditure February 7th, 2017Team
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Excel SLN Function

The Excel SLN function is one of many Excel financial functions, and can be used to calculate the straight line depreciation of a long term asset. It has the syntax SLN (cost, salvage, life).

Excel SLN Function November 6th, 2016Team
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Basket Purchase Allocation

A business will often purchase a number of long term assets for a single combined purchase price. In order to record the assets in the accounting records and to allow depreciation to be correctly calculated, the basket purchase price needs to be allocated in proportion to the fair market value of the assets.

Basket Purchase Allocation November 6th, 2016Team
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Fixed Asset Trade In

When a business purchases a new asset such as a motor vehicle, it is quite common to trade in or part exchange and old asset to satisfy part of the new asset purchase cost.

Fixed Asset Trade In April 9th, 2017Team
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Buy Equipment with Down Payment in Cash

A business buys networking equipment to the value of 12,000 and funds the purchase with a down payment in cash of 3,000 and the balance on credit terms form the supplier of the equipment.

The double entry bookkeeping is recorded using this equipment purchase compound journal entry.

Buy Equipment with Down Payment in Cash November 6th, 2016Team
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Equipment Purchase via Loan Journal Entry

A business purchases equipment to the value of 10,000 for use in its production facility and pays by means of a business equipment loan.

The double entry bookkeeping is recorded using this equipment purchase via loan journal entry.

Equipment Purchase via Loan Journal Entry November 6th, 2016Team
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Fixed Assets Journal Entries

The fixed assets journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of fixed assets.

In each case the journal entries show the debit and credit account together with a brief narrative.

Fixed Assets Journal Entries February 16th, 2017Team
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Disposal of Fixed Assets – Journal Entries

When a business has a disposal of fixed assets, the original cost and the accumulated depreciation to the date of disposal relating to those fixed assets must be removed from the accounting records. A disposal of fixed assets can occur when the asset is scrapped and written off, sold for a profit to give a gain on disposal, or sold for a loss to give a loss on disposal.

Disposal of Fixed Assets – Journal Entries June 6th, 2017Team
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