|
|
|
|
|
|
Let's Walk You Through Bookkeeping Depreciation This is an entry that you can make the call on whether you're going to deal with it monthly or annually. It's not a cash expense, in fact it's often sniffed at as a "paper expense" but if you have a pretty good sized company and you think you're making great money, don't count those chickens until you figure in your depreciation. It's real stuff, because things DO in fact wear out and have to be replaced, and this is where that process is built into your books. Basically, your accountant will give you a sheet listing your assets and the amount they will depreciate this year. You take those totals, and say, OK, my tools are going to depreciate a total of $890 this year. Take that number and divide by 12, and you have your monthly depreciation, which in this case is $74.17. So to give yourself a really good idea of where you are, each month make the entry of debit account depreciation expense $75, and credit accumulated depreciation - tools by the same amount. If you have office equipment, vehicles, buildings, all those will have their separate totals that you work with the same way. Most computer accounting systems have a setup where you can tell it to make those entries for you automatically each month, and you won't have to worry about it. Don't worry about being too exact - at the end of the year, you'll go through each of these numbers and adjust it so it's exactly in line with your depreciation schedule. Making the entries monthly saves you the shock when you thought you'd made $20,000, and your depreciation expense at the end of the year cuts that in half.
Jump ahead, or backwards with these links: |
QUICK LINKS
Real Life Accounting is now offering a variety of Online, E-Book and Print courses.
CLICK HERE FOR MORE INFORMATION
INTERNET WEB DIRECTORY |
|
Home
Copyrighted 1999-2008 All Rights Reserved This page last modified:
11 Mar 2008
|
