02-08-2010, 01:18 AM
you did't get me, or i think i did not make it clear, i actually am maintaining of new branch's accounts as well and was asking for that, when i return credit for headoffice is when i make the entry.
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Dard</i>
<br />hÃ, SALAAM,
=> Regarding your liability question, your entries are wrong. If you credit cash again when you collect debt then it means you have spent more cash, which is a wrong entry. Did you pay your new branch in cash to help them? And is the new branch paying your head office in cash for reducing their liability?
=> You need judgement and estimate for depreciation. Estimate the economic life of assets and then you can use straighline method of depreciation of reducing balance method. Remember all assets within the same class will be depreciated(you can't depreciate just one computer and leave the rest computers undepreciated)
=> You have to account for all the transactions that occured in this accounting year. Use of telephone and bills relating to next accounting year will be dealt with in that accounting year. Assuming your repair expenditure for the current year is of revenue nature, it must be charged to the income statement for the current year(capital expenditure will be capitalised)
=> Advertisement expense is NOT capitalised but ALL the expense of current year is written off to the current year's income statement. When you will incur advertisement expense next year then it will written off to the income statement of that year
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Dard</i>
<br />hÃ, SALAAM,
=> Regarding your liability question, your entries are wrong. If you credit cash again when you collect debt then it means you have spent more cash, which is a wrong entry. Did you pay your new branch in cash to help them? And is the new branch paying your head office in cash for reducing their liability?
=> You need judgement and estimate for depreciation. Estimate the economic life of assets and then you can use straighline method of depreciation of reducing balance method. Remember all assets within the same class will be depreciated(you can't depreciate just one computer and leave the rest computers undepreciated)
=> You have to account for all the transactions that occured in this accounting year. Use of telephone and bills relating to next accounting year will be dealt with in that accounting year. Assuming your repair expenditure for the current year is of revenue nature, it must be charged to the income statement for the current year(capital expenditure will be capitalised)
=> Advertisement expense is NOT capitalised but ALL the expense of current year is written off to the current year's income statement. When you will incur advertisement expense next year then it will written off to the income statement of that year
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