depreciation

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Calculating/Estimating depreciation

• Before it is entered in the books depreciation has to be calculated
• Where an accurate figure cannot be estimated an estimate has to be used
• It is entirely up to the business in question to choose an appropriate way of calculating depreciation for each class of assets
• Whatever the […]
  

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: The reducing balance/diminishing balance method

• As discussed in this topic there are number of ways in which depreciation can be calculated
• The reducing balance method is one of these methods
• It is also known as the diminishing balance method
• A fixed percentage is deducted from the first from cost then […]
  

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes:  Double entry for Depreciation

• Once depreciation has been calculated using either:
• The straight line method or
• The reducing balance method
• It is recorded in the books using double entry
• Before we mention the entries it is important to state this

The old method of accounting for depreciation by recording it in the […]

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Disposal of Fixed Assets Example

• Now that we have looked at the entries required to record depreciation
• It is time to look at a simple example:

A business whose financial year ends at 31 December purchased on 1 January 20X7 a machine for $5,000. The machine was to be depreciated by ten […]