Accountancy

The assumption underlying the fixed installment method of depreciation is that of Equal usage of the asset over its useful life.

In case of opening Credit Balance, the word By Balance b/d are written on the credit side.

Any written evidence in support of a business transaction is called Voucher. Vouchers are the primary evidence of business transactions having taken place.

In depreciation calculation, the useful life of a fixed asset is an estimate. Depreciation is “the systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage value or residual value, over the assets estimated useful life.” Simply said, it’s a way of allocating a portion of the cost of an asset over the period it can be used.

The persons who sign Articles and Memorandum of the company and contribute in the initial share capital of the company are called Subscribers. They are called subscribers because, as part of the company formation.

The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as Current assets. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets.