Capital expenditure vs revenue expenditure

answered on 10-Mar-20 18:40

Generally replacement cost is regarded as revenue expenditure. I have a doubt in this regard, If an asset is purchased having life of 5 yrs and after using it for 3yrs replacing total asset with similar kind of asset, whether it turns to revenue or capital expenditure?? How the journal entries are made in the books?? Can anyone please help me out of this doubt!!!

latest answer

Then in which case replacement cost considered as revenue expense

VIJAYA SARADHI MAGANTI

CA Inter

★ 850

2

576

Accounting standard 5

answered on 09-Mar-20 19:30

How an ordinary item with exceptional nature will be treated as per AS5.?

latest answer

Disclose separately

mannem sai

CA Inter

★ 10

1

581

Partnership Accounts

answered on 09-Mar-20 21:18

In P/L Appropriation A/c, while giving interest, salary or commission to partner/s, is it necessary to show them in a particular order or they can be shown in any order? and transfer to reserves will be made only after appropriation of above entries?

latest answer

Actually this is my opinion, correct me if I am wrong As per partnership act there is no provision for int on cap,salaries,commission and provision is for int on partners loan @6% p.a Therefore, first deduct interest on partners loan After that Interest on capital is given for capital contribution and Salaries and commission will be given for hard labour these are only provided only if there is profit. Which should be deducted first should be made clause in agreement if not as per law no int and no salaries/commission and profit will be shared equally. After that if question mentions gen reserve should be provided after int on loan,salaries/commission ,int on cap it should be transferred to gen reserve after that profit will be shared b/w partners. Hope it helps!!!

Deepak Gupta

CA Inter

★ 1K+

1

580

Inventory

answered on 07-Mar-20 11:13

Sales tax is not allowed to cost of inventory and also packing and transporting charges should not be included in the cost of invt as they do not include in other cost

latest answer

When you purchase goods, sales tax paid (currently GST) will form part of cost of inventory if credit of tax is not allowed. Also the cost incurred in packaging and transportation (on purchased goods) to bring the inventory to your location would be a cost of inventory.

Dimple Keziya

CA Inter

★ 4K+

1

606

Investment accounts

answered on 13-May-20 10:18

Sir, in below problem in question given that interest is received on 30th September. Then if we sold debentures in october how interest will come.

latest answer

Business purchase account is prepared to incorporate assets and liabilities and settle the purchase consideration. You will learn it in depth in Amalgamation of companies chapter.

Star Ca

CA Inter

★ 3K+

3

630

Investment accounts

answered on 07-Mar-20 17:01

Sir, when convertiable debentures are converted into equity shares, why we credit investment in equity sharesa/c . In invenstment in bonds ledger a/c

latest answer

No we don't credit , the journal entry is Investment in equity shares A/c debit To bond/debentures AC

Star Ca

CA Inter

★ 3K+

1

534

Doubt

answered on 07-Mar-20 12:10

What is 7 8 and 9 points and how can I solve that 3 points can any one explain so that it would be helpful Thanks in advance

latest answer

7) interest received includes 1000 rs which is actually cash received from debtors , so you need to credit debtors account and deduct 1000 from interest received . 8) you need to create a liability for interest outstanding i.e 100000 Ã? 12 % As well as create a asset as interest receivable in balance sheet . 9) you need to prepare a debtors account and create 5% provision. this provision amount will be debited in profit and loss account and in balance sheet you will deduct this provisions from gross debtors

sai t

CA Foundation

★ 2K+

1

638

Live

answered on 06-Mar-20 20:33

Live streaming for accounting standards .. what about starting time and ending time sir

latest answer

4 pm to 5 : 30 pm march 7

Shanmukha Chippada

CA Inter

★ 520

1

550

Notes

answered on 03-Mar-20 17:31

Can any one send me the notes of principle and practice of accounting(full notes) so that It would be help me to prepare for upcoming exams Thanks in advance

latest answer

Pls download from notes section. It is available for free.

sai t

CA Foundation

★ 2K+

1

661

Bills of exchange

answered on 03-Mar-20 03:04

Is bills of exchange possible in real life?

latest answer

Hope it helps!!!

Logesh Sampathkumar

CA Inter

★ 0

4

662