Another accounting interview?
Does the classification of depreciation surrounded by the accounts provide a special bread fund for the replacement of fixed assets? Explain.
Answers:
Providing a special dosh fund for the replacement of fixed assets does not come next to the confession of depreciation. It is surplus to requirements. A fixed asset may still be of use even if fully depreciated.
However, a company may opt to create a special lolly fund for fixed asset replacement if it requests to. This would constitute a separate transaction which would fade away change and increase a latest asset portrayal which may be call fixed asset replacement fund.
No. This is a misconception that lots citizens hold. Cash be invested in buying the asset to be depreciated. Recording depreciation expense respectively year reduce the asset's book efficacy. Depreciation expense is a non bread expense, to be precise, it is not an expense to be exact remunerated beside money; it simply represents the using up of the asset. However, the owner of the asset does not put money into a fund to replace the asset.
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Answers:
Providing a special dosh fund for the replacement of fixed assets does not come next to the confession of depreciation. It is surplus to requirements. A fixed asset may still be of use even if fully depreciated.
However, a company may opt to create a special lolly fund for fixed asset replacement if it requests to. This would constitute a separate transaction which would fade away change and increase a latest asset portrayal which may be call fixed asset replacement fund.
No. This is a misconception that lots citizens hold. Cash be invested in buying the asset to be depreciated. Recording depreciation expense respectively year reduce the asset's book efficacy. Depreciation expense is a non bread expense, to be precise, it is not an expense to be exact remunerated beside money; it simply represents the using up of the asset. However, the owner of the asset does not put money into a fund to replace the asset.