How to Study Straight Line Method Properly? Get Our Expert Guidance
Depreciation is one important aspect in declining values over the year of any tangible asset. That way you can finally charge the amount from profit and loss account rather than directly cutting it off from expense account. It will be a wrong entry since any fixed asset, for example like equipment can still work to earn profits and shouldn’t be regarded as an expense. You can learn about straight line method of depreciation from Fixed or Equal Installment or Straight Line Method or Depreciation on Original Cost Assignment Help.
What is the fixed installment method?
To learn the details on this fixed or equal installment method of depreciation you can find us at 24x7assignmenthelp.com. From Fixed or Equal Installment or Straight Line Method or Depreciation on Original Cost Assignment Help you will notice that this method is oldest among all others and simplest too. The accountant has to divide an asset’s value equally with its useful lifetime. This makes an equal amount cut off from the profit and loss account at the end of each accounting period.
In this method, a company will assume that any fixed asset is used equally in all accounting year so it is natural to used up its lifetime equally. It is made simple for calculating depreciation since you will only have to enter equal amount as year before this accounting year. It is called so because both depreciation amount and useful time period will form straight line in any graph.
Important points to consider:
From a complete Fixed or Equal Installment or Straight Line Method or Depreciation on Original Cost Assignment Help you can get to know some important points on how to calculate it in real accounting periods:
- The amount of depreciation is fixed in any accounting year.
- If you have a rate already then you can calculate it as: Depreciation of the year = Given rate%/100X (Price or cost of fixed asset+ Installation charge- Scrap value)
- If the lifetime is given then you will calculate it as: Depreciation of the year = (Original cost + Installation charge – Scrap value)/Lifetime of that asset X 100
This method is largely accepted because of its simplicity. You will get a complete idea with some illustration when you will request Fixed or Equal Installment or Straight Line Method or Depreciation on Original Cost Homework Help from us. All you have to do is give us a visit and get a complete and professional support. So what are you waiting for? Come find us at 24x7assignmenthelp.com.
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