How to create Deprecation Accounts on Tally

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Introduction:
Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used toaccount for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.
Types:
There are two types of deprecation Method in Accounts :
Frist method is Fixed installment method
And 2nd Demonizing balance method
1. What is Fixed installment method ?
When you purchase any kind of  Fixed Assets like Furniture . Then Depreciation Value will be same on every year
Example :
On 1st April 2016 Furniture purchase Value is ₹200000 and Depreciation Was  10 % p.a .
Then on 31. 03. 2016 Deprecation value was ( ₹200000 * 10 / 100) = ₹ 20000 and Furniture value as on 01.04.2017 was ( ₹ 200000 - ₹ 20000) = ₹ 180000 but the next year on 31.03.2017 Deprecatipn value not chang and The value was ₹ 20000 and as on 01.04. 2018 Furniture value will be ( ₹ 1800000 - ₹ 20000) = ₹ 160000.
2. What is Demonizing balance method ?
When you purchase any kind of  Fixed Assets like Furniture . Then Depreciation Value will be not same on every year . The value will charge as on Asset value .
Example:
On 1st April 2016 Furniture purchase Value is ₹200000 and Depreciation Was  10 % p.a .
Then on 31. 03. 2016 Deprecation value was ( ₹200000 * 10 / 100) = ₹ 20000 and Furniture value as on 01.04.2017 was ( ₹ 200000 - ₹ 20000) = ₹ 180000 but the next year on 31.03.2017 Deprecatipn value chang and The value was ( ₹ 180000 * 10 /100 ) = ₹ 18000  and as on 01.04. 2018 Furniture value will be ( ₹ 1800000 - ₹ 18000) = ₹ 162000 .
So Now come to the Tally .  I usins the Demonizing balance method .
 
Frist you have to create some Ledgers .
1. Machine A/C Under the Fixed Assets.
2. Depreciation A/C under the indirected Expence
3. Create Party Ledger of Party
     Like . Asish Co. Ltd. A/V Under the Sundry Debitor
Now come to Voucher Entrys .
1. When you Purchase a Machine on Cash  the Entry will be.
Press Payment Voucher ( F5)
Machinery A/C.        Dr.        ₹ 200000
      To Cash A/C.                    ₹ 200000
2. When you Purchase a Machine on Chaque or Through Bank Payment  the Entry will be.
Press Payment Voucher ( F5)
Machinery A/C.        Dr.        ₹ 200000
      To Bank A/C.                    ₹ 200000
3. When you Purchase a Machine on Credit  the Entry will be.
Press Adjustment Voucher ( F7)
Machinery A/C.        Dr.        ₹ 200000
      To Asish Co. Ltd  A/C.    ₹ 200000
4. When You Change Deprecation on Machinery the entry will be. And I guess Depreciation was 10% P.A
Deprecation Value was ( ₹ 200000 * 10 / 100) = ₹ 20000
Press payment Voucher ( F5)
Deprecation A/C.      Dr   ₹ 20000
  To Machinery.                 ₹ 20000
When you made all this entrys Depreciation value will be show on Profit and loss A/C Debit (Dr) site and Machinery A/C Will be show on ₹ 180000
In Asset site of  Balance sheet .
And that's all your Depreciation A/C will be Made correct .
Thank for reading
     

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