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Capitalisation

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Accounting Home Services (Finance Executive ) (733 Points)
Replied 04 April 2014

HELLO BINOD PRINTER PURCHASE IN CASH OF RS, 20000/-

1ST ENTRY THEY DID eg. Printing & Stationary A/c.........Dr              20000/-              -

 To Cash A/c.................................................................Cr                   -             20000/-

Now they Want Capitlise Printer.

So I Suggest Simple Way.

Office & Equipment A/c..............Dr         20000/-

To Printing & Stationary A/c.......Cr                          20000/-

How u paased entry Binod....?

 



Binod Padhi (Auditor) (52 Points)
Replied 04 April 2014

Printing and stationary is an expense head.Printer is an asset. The entry you have passed is a part of rectification entry. If u purchase an asset then asset comes in debit and cash/bank goes out credit or if creditor arises then credit.


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