Tell me why we cannot depreciate stock?
Submitted by: AdministratorDepreciation is charged only on fixed assets because we are allocating the total expense of Fixed asset for many years.
Stock is a current asset generally used to sell with in a year only.
More importantly we show consumption of stock in Trading A/c through Cost of goods sold.
(i.e.,Opening stock + Purchase - Closing Stock)
That means Stock consumption expenses is already booked in Trading A/c hence we do not show again as expense by treating as deprecation.
Submitted by: Administrator
Stock is a current asset generally used to sell with in a year only.
More importantly we show consumption of stock in Trading A/c through Cost of goods sold.
(i.e.,Opening stock + Purchase - Closing Stock)
That means Stock consumption expenses is already booked in Trading A/c hence we do not show again as expense by treating as deprecation.
Submitted by: Administrator
Read Online Accounting Reports Job Interview Questions And Answers
Top Accounting Reports Questions
| ☺ | Do you know Variance Analysis with Example? |
| ☺ | What is Budgeting? |
| ☺ | Explain how to place journal entry for purchase order in books of account? |
| ☺ | Tell me how to prepare funds flow statement? |
| ☺ | What is difference between forecast and budget? |
Top Finance and Accounts Categories
| ☺ | MBA Finance Interview Questions. |
| ☺ | Bank Teller Interview Questions. |
| ☺ | Capital Market Interview Questions. |
| ☺ | Bank Reconciliation Interview Questions. |
| ☺ | Cashier Interview Questions. |
