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author's profile photo Former Member
Former Member

basic question in asset, expense

From Wikipedia, i understood that - Assets and expenses increase in value while debited and decrease in value while credit. It holds correct for Asset.

But how can it be for expense? How expense will increase in value while debited or decrease in value while credited?

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    author's profile photo Former Member
    Former Member
    Posted on Mar 04, 2007 at 10:05 AM

    Hi vigesh

    The assets increase while debiting.

    The expense increase while debiting.

    But in between there is an account for accumulated depreciation which is credited with the same amount of dep expense which will adjust the asset value.

    Hope this helps

    Thanks

    Ashok

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  • author's profile photo Former Member
    Former Member
    Posted on Mar 04, 2007 at 12:35 AM

    HI Vignesh

    As its a recon account, you cannot post directly to an asset. you create a internal order. Debit and credit all your expenses to an IO and settle the IO on a periodic basis to an AUC. Once you feel that all the debits and credits are over for that asset, you settle the AUC to the Final Asset.

    2) Incase if you want to debit to an existing final asset, you creat a sub asset no to the main asset through AS11. Settle the AUC to sub asset.

    3) The advantage is that your main asset number deprecation calculation will not get affected since it has already been capitalised and being depreciated already.

    Please revert back whether it is a useful and meets your requirement.

    Regards

    Chandrasekaran

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