Cash system
This query is : Resolved
Asawari Malhotra
(Querist)
07 July 2013
Is fixed assets account maintained in cash system of accounting ? If yes, then the entity has purchased a fixed asset for 14,00,000 and paid only 8,00,000 for it.. will the asset be capitalized with the full amount ? and shown the rest shown as a liability.. but wont this make it accrual system then ? .. please help.. and please explain in detail ..
CMA Ramesh Krishnan
(Expert)
07 July 2013
No, you cannot make the fixed asset as cash system basis. since the assets already transfer in your name while doing purchase, so need to book full value and show the creditor in liability side the payable
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