Recording Depreciation in quickbooks desktop

In this tutorial we will see two ways of recording depreciation value in quickbooks desktop

Anyhow, Lets suppose, after calculating the depreciation value by using the concerned method, your CPA has provided you with the monthly values so that you can record them into your books accordingly and, you can record the depreciation value either by going to the concerned asset’s accumulated depreciation ledger or by recording a general journal entry.

 Instructional Tutorial:

Now, go to the chart of accounts and double click on the concerned asset’s “Accu Dep” account, and if you don’t know how to set up fixed assets accounts Plz! watch my tutorial named “ Purchase and record fixed assets” I will provide the link in the description and in the video cards section”, anyhow when you will click on the “Accu Dep” account, it will open its ledger,.. and remember it’s a non-cash transection that’s why you don’t need to fill the “Payee” column and also you need to make sure that you have a  depreciation expense account in your charts of accounts and if you don’t find one, just go to your chart of accounts and select “new” under “Account” and create an expense account named depreciation and since it’s a deduction in the value of the asset, just write the depreciation value in the “Decrease” column and click on record and close the window it will record the transection and reduce the book value of the asset by the depreciated value which is 55 a month and will not change the actual purchase price of the asset.

Now, lets use the second way of adding depreciation value by recording the general journal entry. To record the general journal entry, select “Make General journal Entry” option under the company menu.

Here, change the date accordingly, and select “Depreciation Expense” account and write the depreciation value which is 55 a month on the debit side, since it’s a business expense, and then select the concerned fixed asset account’s accumulated depreciation account and write the depreciation amount on the credit side, in my case HP ZBook Laptop’s accumulated depreciation account and then write the memo if you want,… and since this is a recurring transection, we can click on memorize to let the quickbooks know to record this transection automatically at the end of every month by filling these fields and then click on “save and close” to record the journal entry.

And here you can see that the value of Accumulated depreciation account has increased and the book value of the asset has gone down by the same value.

Now lets open the balance sheet to see how it appears on the balance sheet and here you can see that its showing the total depreciated value, the cost price and the current book value of the asset which is a laptop in my case.

Anyhow, whatever method you feel comfortable with to record depreciation, just use that and if you still feel uncomfortable, I would highly recommend you to leave this for your accountant or CPA who will take care of it for you.

 and I hope it will be helpful for someone out there and thanks for watching.

How to record fixed assets in quickbooks

In this tutorial I will talk about purchasing and recording fixed assets in QuickBooks desktop.

 

 

Anyhow, neither i have added any fixed asset item in the fixed assets item list nor i have created any related accounts in the chart of account so far even though we have a default fixed asset account named “furniture and equipment” which we sure can use, but for this example, I will create new ones at the time of purchasing the asset.

Tutorial Instructions:

 Well to purchase something, either you create a purchase order to pay your vendors or you write a check right away the basic different of creating purchase order and writing a check is that you follow the workflow to pay your vendors when you create purchase orders whereas, when you write a check to pay your vendors, it affects your bank account right away….

Anyhow, in this example, I am going to write a check to purchase a Laptop. So, select “Write checks” under the “Bank” menu. Here , First select your bank account by clicking on the bank account field, then change the date and select a vendor and if you don’t find one, just click on “Add New” and create one or just write the name of your vendor and then click away, it will open a small pop up window and if you have the full info of your vender, just click on “set up” and create your vendor’s profile properly or just click on “Quick add” to create your vendor’s profile with as minimum info as possible.

Then, select the Items tab and click on the “Item” field, it will show you the list of all your items but since we are going to purchase a fixed asset. just click on “Add New” and Select “Fixed Asset” in the “Type” field.

Now, write the name of your asset in the asset name field and if the name of your asset is too long then use abbreviation.  Since I am going to buy a laptop, I am going to write the full name, then write the purchase description and change the date you purchased the asset on and enter the cost of the asset, and add your preferred vendor if you want,

Now here in the asset account field, we can create the related accounts that will appear in the chart of accounts, and to track the asset properly, we need to create three fixed assets accounts.

So, click on the dropdown and select “Add New”, here, make sure that you have selected “Fixed Asset” in the Account type filed and then fill the concerned fields and click on “Save & close”, now our main asset account has been created, and we need to create two more accounts to track it properly, so click on “Add new” and create a cost account and make it a sub account of the asset you want to track, in my case a laptop and then fill the other fields if you want or just click on “Save & Close”.

and here you can see that our main and one sub account has been created and we need to create one more account to record its depreciation, in simple, depreciation is the used-up value of the asset the we allocate to it over its useful life. Well, different methods are used to calculate the depreciation value, like straight line method, declining method, double declining method, etc.  we will talk about the most common ones in the future tutorial,

Anyhow, click on “add new” and create the accumulated depreciation account and make it a sub account of your main fixed asset account which is a laptop in my case….and fill the remaining field if you want and or just click on “save and close”.

Here you can see that the concerned accounts have been created and now we can track it quite conveniently, then, fill the remaining fields if you want or just click on “OK”, here Quickbook just giving me the grammatical errors it’s found, I’m just clicking on ignore all.

Now our fixed asset item and related accounts have been created and it’s also filled the purchased amount which we provided here and if you have paid some significant delivery or other cost, you can add that in the expense tab and write some memo if you want or just click on “save and close”, now we have just recorded a fixed asset into our books. Now lets go to the fixed asset items list to see if a fix asset item has been created or not and here you can see that it’s been created here,

Now let’s go the chart of accounts to see whether the related accounts have been created or not and here you can see that they have been created with the purchased value of the fixed asset which is 3500 in my case and as I mentioned earlier that if you buy something by writing a check, the concerned bank account will affect right away and here you can see that the bank account amount has been reduced accordingly.  

Anyhow, it’s just a matter of preference whether you setup the accounts and items list before recording the purchase or not, in my example I have created them while writing a check. Whatever the way you feel comfortable with just go for that and record the purchase in your books.

How to change company profile in quickbooks

In this tutorial, we will see whether how we can change our company information in quickbooks desktop. 

So, before changing the info, first go the create invoices and select preview under the print dropdown to see how the company info is written on the invoices at this point in time.

Instructional Tutorial:

 

Now, click the “Company” menu and select “My Company”. And here is the current info that has been added to this company.

Now, click on this pencil icon to make changes in the info.

Under “Contact information”, change your company name: suppose the sample or fictional company I am working on, has been registered as LLC, so we can add “LLC” at the end of the name to let the people know that it’s a registered company, and since it’s a 3D designs services and trading company, we can add 3D in the name too. So that people can understand by reading the name whether what services and products have been offered by this company. 

And add other info like, Address, Fax Number., Email, Website.

Then click on the “Legal Information” and Change the company name and address info here too.

Then Click on Company Identification where you can add Employer Identification Number and Social Security numbers than click on “Report Information”, its where you can change your Fiscal and tax year which may be different according to your business.

And here you can change your income tax form and since the fictional company I am working on has been registered as LLC instead of Partnership, corporation or S. Corporation, I am not going to change the form as its still owned by a single person. And if you are confused whether what form needs to be selected than I would recommend you to go to your country’s concerned website and search your needed info or choose “Other/None” option and contact your accountant or CPA who will help you with this.

Now, click on “Payroll tax form information”, here you can add the info of the person who is responsible for preparing and signing the payroll tax forms. Now after changing the concerned information, click on “OK” and here you can see that the info has been added and the name of the company has been changed.

Now, go to the invoices and select preview under the print dropdown again and here you can see that the name of the company has also been changed and this is how, you can change or edit your company info in QuickBooks desktop.