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Re: Example of depreciation transactions?
- Subject: Re: Example of depreciation transactions?
- From: Ed W <..hidden..>
- Date: Sun, 12 Nov 2006 21:19:29 +0000
AP transactions are better than invoices for this.
Yes, sure. Actually that is what I used. Bad terminology on my part. :-)
You can also make an asset account show up on the AP transactions
screen by checking the Payables Expense/Asset checkbox. Moving the
money to expense first needlessly complicates your books. IANACPA,
but I have a hard time believing that this is GAAP compliant.
Indeed. I realise this, but it's not setup like this from the start and
so I wonder if I am missing something? Perhaps Dieter had an
alternative proposed solution...
Just to be clear: you are suggestion that the GAAP correct method is
(probably) to book the transaction directly into the asset account?
Just checking-- this is an accrual basis statement, right?
And trial balance shows the amounts, right?
Yep. Balance sheet shows (say). Assets £300, Depreciation £200 - where
the original transaction was for a £500 item, ie we are simply seeing a
transfer from Assets to depreciation
I think this is the problem - I can't get it straight in my head, but
the correct transaction should instead be something like credit income,
debit depreciation? Shouldn't the Asset value remain showing the
original book value of the assets, the depreciation account should get
larger and profit should decrease?