Assesment-3 Essay Example | Topics and Well Written Essays - 2000 words

Assesment-3 - Essay ExampleFor the goal of recording a transaction an account is maintained like Cash A/C, Depreciation A/C etc. An account can be defined as the summarized record of the transactions. To obtain both information it is not possible to go through all the transactions. So, one can refer to the respective(prenominal) account and find out the details. An account is divided into two arrays - debit entry and credit. The right hand aspect is the credit side and the left hand side is the debit side. The term debit represents all the expenses, losings etc. and credit all the incomes and gains. The net of the debit and the credit side gives the balance at the nullify of the course. At the end of the year, a statement ascertaining the service and button is prepared called the Profit and Loss A/c. It is prepared after closing all the accounts and posting the balances in the Profit and loss A/C. If the good of the credit side is more than the total of the debit side there is a profit and if the debit side total is more than the credit side total there is a loss. An account is open up as follows The process of allocation of the cost of the asset is called depreciation. In other words, the reduction in the value of assets over its useful life is called depreciation. It does not involve any cash outflow provided is only a record in the books (National Productivity Council Of India, Pg no 1). In the books of account every year an amount is put down as an expense and charged as depreciation in the statement of profit and loss. In accountancy, there are two aspects of recording a transaction debit and credit. The debit side represents all the expenses, losses etc and the credit side represents the incomes, gains, etc. Depreciation is an expense to the firm and hence recorded on the debit side of the statement. This helps in finding out the true profit or loss of the business operations. The most