please tell me that depreciation is in which nature of account and while posting the accounting entries how we follow the 3 golden rules of accounting?
please answer these two questions,
thanking you
2 Replies
Anand P
(Student)
(26 Points)
Replied 24 July 2013
Depreciation is in the nature of nominal account, For ex. while posting the entry for depreciation on computer
Depreciation A/c Dr
To Computer A/c
Because depreciation is non monetory expenses & it is nominal account, its accounting rule is "debit all Expenses & Losses Credit all incomes & gains". Depreciation is an expense so we have to debit it.
Computer is in the nature of real a/c, its rule is "Debit what comes in Credit what goes out". When reduction in the Value of asset we have to credit it th e asset A/c.
sachin
(ARTICLES)
(434 Points)
Replied 24 July 2013
The main concept behind to provide depreciation is revenue matching concept... Means income is earned due to use of particular asset.
so we have to provide depreciatuon on asset.
I totally agree with anand
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