what is accumulaated depreciation ? and wht is effect of it in
profit and loss a/c and balance sheet ??
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Answer / sajeermoidu
The cumulative depreciation of an asset up to a single
point in its life. Regardless of the method used to
calculate it, the depreciation of an asset during a single
period is added to the previous period’s accumulated
depreciation to get the current accumulated depreciation.
for example,we have an asset value of 20000,5yrs life time
so depreciation per year is: 4000
depreciation a/c DR......... 4000
to accumulated depreciation CR........4000
now 4000(depreciaton ) shown in the p&l a/c
20000 shown in the balace sheet as fixed asset
4000(accumulated depreciation ) shown in the liabilty side
of the balance sheet
now the net value of the asset is 16000(20000-4000)
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