what is machinary in a company ?
2 Answer(s)
Sireesh
machinery is an asset to the company as it is used for the long term for the purpose of production of products
Apr 17 2014 08:41 PM
Muhammad
it depends.
if your company is dealing in machinery (i.e. trading in machinery like generators etc) it is inventory or a Current Asset (not a Fixed Asset).
if your company has machinery for office or factory use then it is a Fixed Asset (also called a Tangible Non-Current Asset by IFRS).
If this machinery was provided by the owner of the business it is Fixed Asset and also Capital as well. Why? Because by nature it is a Fixed Asset and this Fixed Asset was provided by the owner of this business so its part of capital. In other words the accounting double-entry will be:
Dr. Machinery A/c
Cr. Capital A/c
If this Machinery was purchase from a supplier on cash or credit then accounting entry will be:
Dr. Machinery A/c
Cr. Supplier A/c (if purchased on credit) or
Cr. Cash/Bank (if payment made at purchase)
Hope this helps. If you need more info let me know.
Apr 22 2014 11:52 AM
if your company is dealing in machinery (i.e. trading in machinery like generators etc) it is inventory or a Current Asset (not a Fixed Asset).
if your company has machinery for office or factory use then it is a Fixed Asset (also called a Tangible Non-Current Asset by IFRS).
If this machinery was provided by the owner of the business it is Fixed Asset and also Capital as well. Why? Because by nature it is a Fixed Asset and this Fixed Asset was provided by the owner of this business so its part of capital. In other words the accounting double-entry will be:
Dr. Machinery A/c
Cr. Capital A/c
If this Machinery was purchase from a supplier on cash or credit then accounting entry will be:
Dr. Machinery A/c
Cr. Supplier A/c (if purchased on credit) or
Cr. Cash/Bank (if payment made at purchase)
Hope this helps. If you need more info let me know.