HOW TO DO / MAINTAIN PROVISION FOR DEPRECIATION A/C I CAN,T UNDERSTAND IN NOTES PLEASE CAN U EXPLAIN ME.. ??
When Provision for Depreciation Account is maintained then the depreciation charged is credited to this account and the entry will be:
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Particulars | L.F. | Debit Amount Rs | Credit Amount Rs | ||
Depreciation A/c | Dr. |
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| To Provision for Depreciation A/c |
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(Depreciation charged on asset) |
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Thus depreciation will not be credited in the asset account and the value of the asset will continue to appear at the original cost.
Depreciation will be shown on the credit side of the Provision for Depreciation Account and balance is carried down.If any asset is sold during that year then depreciation amount will be shown on the debit side and transferred to the asset or asset disposal account.
In the Balance sheet either the provision for depreciation may be deducted from the cost of asset and balance is shown in the outer column or asset may be shown on the original cost and provision for depreciation is shown on the liabilities side.