For various reasons, sometimes the depreciation of fixed assets is accrued more than necessary. How to handle accounting at this time? Generally speaking, accounting is performed by setting the "Prior Year Gain/Loss Adjustment" account, without cost adjustment.
Adjust accounting entries for multiple depreciation accrual
Adjust the depreciation accrued in the previous year:
Debit: accumulated depreciation
Credit: Profit and loss adjustment of previous years
When carrying forward:
Debit: Profit and loss adjustment of previous years
Credit: profit distribution - undistributed profit
What are the depreciation methods for fixed assets?
The depreciation methods of fixed assets include average depreciation method and accelerated depreciation method. The average depreciation method includes the straight-line method and the workload average method; The accelerated depreciation method includes the sum of years method and the double declining balance method.
1. The straight-line method, or straight-line method, refers to the method of calculating depreciation on an average basis based on the service life of fixed assets. The annual depreciation amount calculated in this way is the same. Therefore, if the service conditions of fixed assets in each period are roughly the same, this method can be used.
2. The workload averaging method refers to the method of accruing depreciation amount based on the workload provided by fixed assets. This method is suitable for fixed assets with large differences in burden and unbalanced economic benefits during use.
3. The sum of years method refers to the net value of the original value of fixed assets minus the estimated residual value and multiplied by a depreciation rate that decreases year by year. This method is applicable to fixed assets that are frequently updated and iterated due to technological progress, as well as fixed assets that are under strong vibration and high corrosion all the year round.
4. The double declining balance method refers to multiplying the net book opening balance of fixed assets in each period by a fixed depreciation rate without considering the expected residual value of fixed assets. This method provides more depreciation in the early use period of fixed assets and less depreciation in the later use period.
?