Accountancy, asked by abhay4u, 5 months ago

What is the reason that Depreciation on Fixed Assets is not shown in Receipts and Payments Account?​

Answers

Answered by shruti832
46

Answer:

Receipts and payments are cash transactions. Depreciation is an accounting estimate of the value of an asset that you purchased or created (cash) in a previous period spread over the future periods of it’s intended lifetime. It is therefore not a cash item.

You would see the total value of depreciation (for the whole asset life) in the prior periods that you either purchased the asset or created it internally as a single or collective sum of payments.

Explanation:

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