THE DEPRECIATION PROCESS
1. SALES AND SERVICE FUNDS (6XXXX)
Monthly Financial Entry -
- Operations will be charged the rate determined for depreciation.
- Unexpended Balance Sheet account for the Renewal and Replacement (A-59)
fund (76XXX) will be credited.
- Unexpended Balance Sheet account for the Renewal and Replacement (A-59)
fund (76XXX) will be debited.
- Unexpended Balance Sheet account for the Reserve fund (75XXX) will be
credited
Year End Budget Entry-
- Unexpended Balance Sheet account for the Reserve fund (75XXX) will be
charged.
- Funds will be moved to the Asset Acquisition Fund (6XXXX)
- Equipment is purchased from Asset Acquisition Funds
2. AUXILIARY
ENTERPRISE FUNDS (70XXX)
Monthly Financial Entry -
- Operations will be charged the rate determined for depreciation.
- Unexpended Balance Sheet account for the Reserve fund (75XXX) will be
credited
- Equipment is purchased from the Reserve fund 75XXX
3. RENEWAL AND
REPLACEMENT FUND (76XXX)
Funds held in reserve for the costs of capital assets that exceed the funding
made available through depreciation. Also
can be funds held in reserve to provide working capital to finance the
investment in inventory and receivables. Normally
these funds are generated through setting prices above costs (must be approved),
and generating a surplus. At campus
option, Accounting can transfer accumulated earnings at year end to this fund.
This fund is in the Plant Fund group.