after depreciation asset value reduced and posted to PL accounts and reduce profits
but in actual it not affect cash balance
depreciation amount can be added to cash balance ?
10 Replies
CA Neelima Kotha
(Consultant)
(606 Points)
Replied 08 August 2018
Depreciation is a non-cash expenditure. Cash balance will not be affected by depreciation
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 08 August 2018
No... Depreciation is applied in Fixed Assets value. The Asset value reduced as Depreciation and It's transferred to PandL Account ...
Cash Ledger is not involved in this Transaction.
Cash Ledger is not involved in this Transaction.
sunil
(executie)
(185 Points)
Replied 08 August 2018
my confusion is supose 200000 profit before changing dep after depreciation profit 180000 but my cash remain 200000
CA Neelima Kotha
(Consultant)
(606 Points)
Replied 08 August 2018
Yes...cash balance will remain unchanged.
Depreciation is affected in P&L account and Fixed asset account. Profit is reduced in P&L account and also depreciation is deducted from Fixed asset balance.
There is no need to alter cash balance
Depreciation is affected in P&L account and Fixed asset account. Profit is reduced in P&L account and also depreciation is deducted from Fixed asset balance.
There is no need to alter cash balance
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 08 August 2018
Yeah... Depreciation and It's value not affected in Cash Ledger...
Also You ll see Your book entry of Depreciation. It's as
Dr. Depreciation A/c - Rs. XXX
Cr. Fixed Asset A/c - Rs. XXX
See the entry it's from Fixed Asset value to Depreciation Value...
Also You ll see Your book entry of Depreciation. It's as
Dr. Depreciation A/c - Rs. XXX
Cr. Fixed Asset A/c - Rs. XXX
See the entry it's from Fixed Asset value to Depreciation Value...
sunil
(executie)
(185 Points)
Replied 08 August 2018
i am showing cash balance in balacesheet is 11 of my capital
any limitation on showing cash balance in balance sheet
any limitation on showing cash balance in balance sheet
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 08 August 2018
Capital...???
No more limits for showing cash balance except Negative Figure...
No more limits for showing cash balance except Negative Figure...
sunil
(executie)
(185 Points)
Replied 08 August 2018
27 lakh capital in laiblity side and 3 lakh cash remainning asset
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 08 August 2018
No more clarity for Your query...
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