Fixed asset is one of the important components for preparing a financial statement. Students of accounts department learn the skill of preparing a financial statement, the main quality of an accountant. An accountant considers several components for making a financial statement, such as assets, liabilities, marketable and non marketable instruments, shareholders’ equity basics, stockholders’ equity, etc.
There are two types of assets: current assets and long-term assets. Fixed assets fall under long-term assets. Students often get confused when they sit to do their assignments on financial statements. In such a case, fixed assets help homework is a good option for them to understand clearly about fixed assets and complete their assignments.
Every company owns some kinds of fixed assets with a longevity of more than one financial year. Companies do not purchase fixed assets for immediate resale. They mainly use fixed assets for productive usage within the entity.
Property, plant, and equipment are fixed assets. There are several items in a company, but all of them are not fixed assets.
List of common fixed assets in every enterprise:
- Infrastructures, such as building, power supply, and computer accessories
- Intangible assets
- Motor vehicle
When a company buys fixed assets, it records them as assets initially. They are dependent on the given accounting transactions:
- Amortization in a case of intangible assets
- Periodic depreciation in a case of a tangible asset
- Impairment write-downs, if the assets’ value fall down than its net book value
- Disposal, if companies dispose of the assets
While making a balance sheet, students must remember that they have to record fixed assets at the net book value of the financial report. They need to record their actual price, deducting accumulated depreciation and impairment charges. Due to the regular depreciation of fixed assets, their net book value also declines regularly.
Fixed assets help homework guides the students in recording them correctly in the financial statements. Students also learn to distinguish between different types of assets. Right knowledge of assets helps the students to prepare financial reports correctly. There involves lots of calculation and students must do all the calculation very carefully.
Fixed assets are not always “fixed.” They are several portable, fixed assets.
For instance, a laptop is a fixed asset, when its cost is more than the capitalization limit, but people can easily carry it from one place to another.
How one records fixed assets in accounting statement?
Fixed assets help homework makes it easy to record fixed assets. Various steps to record fixed assets are given below:
- Initial recordation:
Assuming that a company has bought fixed assets on credit, students need to make the initial entry of the assets as a credit to accounts payable and the costs of those assets they need to enter as a debit. Freight charges, installation charges, sales taxes,etc. all come under the cost of assets. A financial report may contain several fixed assets accounts, such as office equipment, property, machinery, etc.
Fixed assets’ value reduces gradually over time, and students need to record the depreciation value of every asset while preparing a financial statement. There are different ways of calculating depreciation values, and straight-line method is the most common method. In straight line method, first one needs to subtract estimated salvage value from the cost.
Next, it has to divide rest of the amount by a total number of remaining useful life of the asset in terms of months. With this method, we can find depreciation value on a monthly basis. Accountant enters the depreciation value as debit under depreciation expense, while entering it as a credit to accumulated depreciation. Students need to pair the balance amount in the accumulated depreciation account with the amount in the fixed asset account, which will, in turn, reduce the asset balance.
On completion of useful life, companies either sell or scrap the fixed assets. Students also need to record disposals of fixed assets. Students need to record fixed assets disposal to debit the accumulated depreciation account for the value of all depreciation charges till date, and to credit the fixed asset account in order to flush out the balance related to that asset.
In case a company sells any fixed asset, then also accountant debit the cash account for the received cash. Whatever outstanding amount it needs to balance this entry, it records it as a profit or loss on asset sales.
Why do students take fixed assets help homework?
There are many renowned authors who have written useful books on accounting with thorough details in fixed assets. Even students find fixed assets help homework as a useful tool to complete their homework. Why? Do those books not contain full information or are difficult to understand? Different students have different opinions. But there are some common reasons for availing the service, such as:
- Fixed asset is a vast topic with many terms. Students often get confused when they study alone. Fixed assets help homework clarifies their doubts instantly with examples.
- Students often do mistakes in inserting values under credit and debit columns. They need supervision to enter the right amount in the right place.
- Qualified professionals who provide fixed assets help gives useful tips to the students, enabling them to identify tangible and intangible assets and treat them accordingly.
- It helps the students to complete their assignments on time amid huge study pressure.
Time for you to buck up!