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Hello sir,
I would like to ask in which day book (journal) should the non-current assets be recorded (cash or credit). In fully depreciated assets, how have we show them in the statement of financial position and in what amount if we still use them? Finally, do we also debit VAT for the acquisition of non-current assets and in which day book, please? Thank you very much.There is no rule about what day books the company decides to use (and most companies do not use day books these days). The exam will test you on the double entries needed – not on the day books.
In practice, with fully depreciated assets, the depreciation in the final year is calculated such that the net book value is left at $1. However again there is no rule about this.
Sales tax on the purchase of non-current assets is recoverable in the normal way (and I cover the entries for sales tax in my free lectures).
Thank you so much. What do companies use nowadays in the UK if not day books?
Computers! 🙂
Day books do not form part of the double entry and are only used to make things easier, especially when entries are being made ‘by hand’ (i.e. not on computer).
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