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Expense? or Asset?
Posted: Tue Jan 27, 2009 12:48 pm
by lhbc-donate
The church books were just reviewed. We purchased a storage container for $4000. In Acct's Payable I CR the bank and DB the expense. I was told to make this an asset (Furnishings & Equip) Is the correct enty to DB furnish & Equip (balance sheet) and CR the expense side in acounting via a manual transaction? ...Carey
Posted: Tue Jan 27, 2009 8:59 pm
by JohnDMeyers
Yes, that is correct.
You should also have a depreciation schedule.
I'll make up some numbers.
01-1190-000 Depreciation Reserve (credit)
01-5590-000 Depreciation Expense (debit)
Your depreciation reserve (asset account) will have a negative balance. The depreciation expense will be a non-cash expense (no money will leave your checking account).
You will have to consult an accountant, or some business website to see how many years you can take to depreciate your furniture and equipment asset.