Assignment Example | Topics and Well Written Essays - 500 words - 164

Assignment Example The value is to be recorded as $215,000 on the debit side, whereas $90,000 is to be credited. According to Jivraj, the customized computer should have been recorded as a miscellaneous expense, but the product, whether with resale value or not is an asset and thus a crediting of the assets account (computers) should have been emphasized by Juma. Additionally, depreciation was to be recorded by division of the total value by six years, as a straight line method was used to evaluate the value of the transaction. The value of the building should not be recorded both in terms of lower costs and fair value, but rather should be recorded as appreciation or depreciation in the capital gains account. Juma and Jivraj have widely varying ways to record these transactions. The transaction does not involve the exchange of cash and thus should not be recorded as three separate expenses which will be credited thrice. However, the total value is to be recorded in both accounts as $60,000. It can only be recorded in the accounts receivable accounts. Additionally, the amount should not be recorded as an amount received as Jivraj proposes, but rather a different approach should be recorded, such as the inclusion of the expense and recording it in the accounts payable as well. The written sales order should not be recorded according to Juma because there has been no exchange of cash. However, this transaction can be recorded as inventory for the computers. However, another approach that can be used is recording these transactions in the accounts receivables bracket. The main reason this is the case is due to the fact that the amount of cash has not exchanged hands and Jivraj records the amount as if it has already