Question
BagIT Sdn. Bhd., which supplies different types of bags, observes an accounting period that ends every 30 September. Comment on the appropriateness of the accounting
BagIT Sdn. Bhd., which supplies different types of bags, observes an accounting period that ends every 30 September. Comment on the appropriateness of the accounting procedure used by BagIT Sdn. Bhd:
During the current accounting period, BagIT sold its old delivery van for RM35,000, thus making a gain of RM12,000. The company also bought a new delivery van for RM50,000. The useful life of the new van is five years. The management has decided to recognize the gains over a period of five years, as a reduction in the depreciation expense of the new van.
You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions).
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