END YEAR ADJUSTMENTS
Before preparing a statement of comprehensive income for a particular period, there are
adjustments that are made to particular accounts to ensure the profit and loss statement shows
accurate results of profits and losses.
These accounts include:
i) Prepayments accounts
ii) Accruals accounts
iii) Bad and doubtful debts accounts
iv) Depreciation account
DEPRECIATION
Depreciation can be defined as that part of the original cost of fixed assets that are consumed
during its period of use in the business.
Depreciation can also be defined as the loss in the value due to of usage of an asset. Almost all
business assets have a given time duration for their existence and as they are used/ consumed
their value keeps on Declining.
Causes of Depreciation
Depreciation caused by the factors discussed below;
i) Physical deterioration
ii) Economic factors
iii) Time
iv) Depletion
Before preparing a statement of comprehensive income for a particular period, there are
adjustments that are made to particular accounts to ensure the profit and loss statement shows
accurate results of profits and losses.
These accounts include:
i) Prepayments accounts
ii) Accruals accounts
iii) Bad and doubtful debts accounts
iv) Depreciation account
DEPRECIATION
Depreciation can be defined as that part of the original cost of fixed assets that are consumed
during its period of use in the business.
Depreciation can also be defined as the loss in the value due to of usage of an asset. Almost all
business assets have a given time duration for their existence and as they are used/ consumed
their value keeps on Declining.
Causes of Depreciation
Depreciation caused by the factors discussed below;
i) Physical deterioration
ii) Economic factors
iii) Time
iv) Depletion
