Dear members,
Pls tell me what is meant by capitalisation of expenses ? And what is the accounting treatment for that ? In tally, can we know which are the capitalised expenses and which are not ? How?
Thanks...
2 Replies
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 March 2011
any expense which is used to develop the fixed assets is to be shifted to capital account,
entry should be alike
Plant and machinery Dr .........................
to
Repair and maintaince to machinery ........................................
Computer & Accessories Dr ...............................
to
Computer maintancnce ..................................................................
here we have to segragare the invoices which are nature of capital goods but posted in the expenses and reverse the entries through journal of the specifc invoice amounts.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 March 2011
another incident is taxes/ duties / freight paid on imported machinery, compute the total sum paid on the capital goods movement
plant and machinery dr .........
to
customs/ tax / freight ............................................................
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