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Re: Example of depreciation transactions?


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?


Ed W