In this quick tip, we will show you how to record a fixed asset purchase in quickbooks desktop. This is a great way to keep track of your purchases and track your budget.
QuickBooks Desktop | Purchase and Record Fixed Assets
[ytvideo]How to Record a Fixed Asset Purchase in QuickBooks Desktop
If you’re ever considering purchasing anything fixed, whether it’s a car, a house, or even a machine, you’ll want to record the purchase in QuickBooks Desktop. Here’s how:
- Open QuickBooks Desktop and click the “File” tab.
- Click the “Accounts” icon and select “Your Account.”
- Click the “Fixed Assets” tab.
- Click the “Add New” button and enter the details of your purchase.
- Click the “Enter Purchase Price” button and enter the price of your asset.
- Click the “Enter depostionary cost” button and enter the cost of your asset, including any applicable taxes.
- Click the “Add New” button and enter the details of your purchase.
- Click the “Enter Purchase Date” button and enter the date of your purchase.
- Click the “Enter Depostionary Value” button and enter the value of your asset, including any applicable taxes.
10. Click the “Save” button.
The purchase is now recorded in your QuickBooks Desktop account and can be used to track your asset’s value over time.
What is a Fixed Asset?
A fixed asset is an item of tangible property, such as a machine or building, that is owned by a business and used in the conduct of its business. Fixed assets can be used to produce revenue and improve the company’s financial position.
When a business purchases a fixed asset, it commits to spending a set amount of money on that asset over a set period of time. The purchase of a fixed asset is usually recorded in a company’s accounting records as a fixed asset purchase.
Fixed assets can have a variety of purposes, including manufacturing, research and development, and marketing. It’s important for businesses to track the value of their fixed assets so they can accurately estimate their depreciation expenses.
What is the Difference Between a Fixed Asset and an Inventory Item?
A fixed asset is something that you use to generate revenue and incur expenses. The most common example of a fixed asset is a building or equipment used to generate revenue. An inventory item, on the other hand, is something you use to generate revenue and incur expenses, but is not a permanent fixture in your business. An example of an inventory item is inventory that you purchase from a supplier.
How to Set Up a Fixed Asset Account
Fixed assets are assets that are not used up in the course of a business. This could include things like computers, furniture, and even a company’s intellectual property.
There are a few different ways you can set up a fixed asset account in QuickBooks. The most common way is to create a new account and then add the items you want to track. You can also create a fixed asset account from a template.
The best way to set up a fixed asset account is to determine the type of asset you want to track and then choose the appropriate method for adding it to your account.
How to Record the Purchase of a Fixed Asset
When you purchase a fixed asset, such as a computer, chair, or car, you will need to record the purchase in your company’s QuickBooks account. The purchase process is fairly simple, but you will need to follow a few steps to ensure that the purchase is properly documented and tracked in your company’s financial records.
To begin, open your QuickBooks account and click on the “finances” tab. Next, click on the “fixed assets” tab and select the “add new asset” icon. This will open the “add fixed asset” dialog box.
In the “add fixed asset” dialog box, you will need to provide the following information about the fixed asset you are purchasing:
1. The fixed asset’s name (for example, “Computer”).
2. The purchase date (for example, “1/1/2015”).
3. The purchase price (for example, $2,000).
4. The fixed asset’s description (for example, “PC”).
5. The fixed asset’s category (for example, “business equipment”).
6. The fixed asset’s account (for example, “account name”).
7. The fixed asset’s description (for example, “New computer”).
8. The fixed asset’s category (for example, “office equipment”).
9. The fixed asset’s account (for example, “account name”).
How to Depreciate a Fixed Asset
When you purchase a fixed asset, you should take into account its depreciable value. This is the amount you can deduct from your taxable income over the life of the asset. The IRS has specific rules about depreciating fixed assets, but the basic concept is that you can reduce the taxable value of the asset over time.
To depreciate a fixed asset, you first need to identify its life expectancy. This is the period of time over which you expect to use the asset and decrease its value. Next, you need to determine the depreciation rate. This is the percentage of the asset’s value that you can deduct each year. Finally, you need to enter the estimated depreciation amount in your quickbooks desktop blog section.
Now, let’s look at an example. Say you buy a car for $15,000 and plan to use it for five years. The life expectancy is five years, so the depreciation rate is 5%. The estimated depreciation amount is $3,000, so you would enter this in your quickbooks desktop blog section.
If you sell the car after only two years, you would have depreciated $1,500 of its value. If you sell the car after five years, you would have depreciated $8,000 of its value. In this example, the car’s depreciated value would be $6,000.
There are a couple of important things to note about depreciating
Conclusion
In order to correctly record a fixed asset purchase in QuickBooks Desktop, follow these steps:
1. Open your Fixed Assets journal.
2. Find the purchase you want to record.
3. Click on the Purchase button.
4. Enter the details of the purchase, including the purchase date, purchase price, and the tax class of the asset.
5. Click on the Save button.
