Pls experts help me.

Provision for Depreciation is a Liability. We provide Depreciation and without actually lessing the value from the Gross Block in the balance sheet, we show it under the Current Liabilities & Provisions. While Depreciation is expensed off and is lessed from the Gross Block in the Balance Sheet.

Dear Akash

Visit the following link : https://www.svtuition.org/2011/05/provision-for-depreciation.html

Ok ....

Agree with Sreeniketh

balance sheet is all about balancing of both sides assets and lia.

and dep is normal wear and tear in the FA due to the time and other factors.

So we have to gradually decrease it so that it won't cause a burden at the time of disposing of fixed assets.

So it;s shows as assets - depriciation.

On the other hand ...Depriciation is mandatory. So we always maintain a provision for it ..

so whatever the amount should be put in depriciation  is also put in the provision for dep a/c

so that assets n lia are properly balanced.

Miss Renu is slightly mistaken about the balancing of Assets & Liabs here. If Depreciation is deducted from the value of assets then it is no longer required to mantain a provision for such amount. Infact depreciation will be charged to P& L A/c and thus the profit will be accurately computed to depict a true and fair state of affairs.

In Reply to Pravin Singh......

Petty Cash Account is essentialy an asset and expenses out of the same should be shown as a reduction of cash. So it is hitting our fundamentals if Petty cash is being shown as anything but an asset. Please correct the same.

Hope this clears.

God Bless

Sreeniketh

to Sreeniketh,

If a company is paying salary in cash  above rs 5000 and maintaining voucher .My query is revenue stamp is required .

And If any payment is made in cash from cash in hand above rs 5000.Is revenue stamp required

Hi Pravin,

Ideally for all cash transactions Revenue stamp is required. But due to many constraints in obtaining the stamps, its now not in use. However since its salary above 5000, please do affix revenue stamp.

Hope this clears,

God Bless

Sreeniketh