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Accounting principles- assignment

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Added on  2021-04-21

Accounting principles- assignment

   Added on 2021-04-21

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Running head: ACCOUNTING PRINCIPLESAccounting PrinciplesName of the Student:Name of the University:Author’s Note:
Accounting principles- assignment_1
ACCOUNTING PRINCIPLES1Table of ContentsQuestion a........................................................................................................................................2Question b........................................................................................................................................2Question c........................................................................................................................................3Question d........................................................................................................................................4Question e........................................................................................................................................4Reference.........................................................................................................................................6
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ACCOUNTING PRINCIPLES2Question aThe cost of the asset refers to the cost which is obtained when the book value of the asset isreduced by the accumulated depreciation or depreciation expenses which is then recorded in thefinancial statement (Christensen & Nikolaev, 2013). The book value of the asset refers to theoriginal cost or the value of the asset. In the case of Apple Inc, the balance sheet of the companyshows that Property, plants and equipment are shown at $ 20,624 million which has increasedfrom the previous years figure. This figure is a result of deduction of accumulated depreciationor depreciation charges from the book value of the asset. The notes to accounts of the companyshows that Property, plants and equipment are stated at costs in the financial statement (Brochet,Jagolinzer & Riedl, 2013). The notes to accounts also states that depreciation has been chargedon straight line method over the useful life of the assets. It also states that the accumulateddepreciation and amortization charges for 2014 is $ 18,391 million which is more thandepreciation charges of previous year. The notes to accounts of the company also depicts thegross book value of Property, plant and equipment which is $ 39,015 million. The gross bookvalue of the asset is deducted by accumulated depreciation to arrive at the stated costs ofProperty, plants and equipment as shown in the balance sheet.Question bDepreciation refers to the reduction in the value of the asset over time due to various factors suchas general wear and tear, effect of time, breakdowns and other similar factors. Depreciation isrecognized as a non-monetary cost which is shown in the statement of profit and loss of thecompany (Drew & Dollery, 2015). Generally, there are two methods of charging depreciationwhich are most popular and widely used by the companies which are Straight line method andDiminishing Value method. Straight line method of charging depreciation allows the company to
Accounting principles- assignment_3

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