Re: Example of depreciation transactions?

["Chris Travers" <..hidden..>]

On 11/12/06, Ed W <..hidden..> wrote:
> Hi
>
> > So the depreciation shows up on the balance sheet?  Under which
> > section?  Is your depreciation account really an expense account (as
> > it should be)?
> >
>
> Depreciation is showing up under the Assets section...
>
> It's *not* an expense account, I am using the default "general" COA from
> SL.  In this it's set as a "contra" account and nothing else.  The
> manual makes vague references to a contra account being useful for
> tracking net accumulated depreciation against an book asset account, but
> doesn't give an example of the transactions.

That would be it.  Depreciation should be an expense.  I guess I will
make sure this gets changed for 1.2.

Contra accounts are useful for things like allowances.  For example,
allowance for doubtful accounts, allowance for returns, and things
like that.  Depreciation is an expense and should be treated as such
(i.e. it is analogous to purchases of non-capital goods but just
amortized over time).

Best WIshes,
Chris Travers