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.