DEAR SIR/MADAM,
IF COMPANY PURCHASE 10 METER WIRE FOR NEW TELEPHONE CONNECTION. WHAT IS THE ACCOUNT LEDGER FOR THIS.
1. TELEPHONE EXPENSE(INDIRECT EXPENSE) OR
2. ELECTRICAL EQUIPMENT(FIXED ASSETS)
DEAR SIR/MADAM,
IF COMPANY PURCHASE 10 METER WIRE FOR NEW TELEPHONE CONNECTION. WHAT IS THE ACCOUNT LEDGER FOR THIS.
1. TELEPHONE EXPENSE(INDIRECT EXPENSE) OR
2. ELECTRICAL EQUIPMENT(FIXED ASSETS)
There are ways of accounting for this. Considering the electrical wire is an essential component for the telephone, you may capitalise this by adding the amount to telephone which might have already been capitalised.
Such a small item should not be capitalized on a stand alone basis. However its value can surely be added to cost of telephone and capitalized. It is an asset but such an item of so small value is not normally capitalized and in fact charged as expense for the year.
We cannot say should not be. You can capialise it and write off in the year itself if the value is less than 5000
| Originally posted by : Ajit Hegde | ||
 |
We cannot say should not be. You can capialise it and write off in the year itself if the value is less than 5000 |  |
I had not written complete sentence and mistakenly pressed post button. I agree with you though.
Agree 100%
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