Unit 5 - Prov for Depreciation A/C
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Wonder if anyone can help me! If you for example bought a vehicle, then open a vehicles account and a provision for depreciation vehicles account, I understand how to depreciate using the straight line and reducing balance methods.
But what if you somewhere along the line purchase another vehicle - how do you depreciate the second vehicle - do you add it on to the depreciating balance of the first vehicle?? Or open another depreciating account maybe?
Any help appreciated!!
But what if you somewhere along the line purchase another vehicle - how do you depreciate the second vehicle - do you add it on to the depreciating balance of the first vehicle?? Or open another depreciating account maybe?
Any help appreciated!!
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Re:Unit 5 - Prov for Depreciation A/C
It depend on your company policy let say if your company policy said that any new vehicle purchase will depreciation for a full year of purchases so you just add up with the first vehicle and calculate the depreciation as normal
But if your company policy said the depreciation only take place when it purchases so you just do it separately with the first vehicle find out the figures then add it up with the first vehicle depreciation.
hope it help.
if it is still not clear let me know
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