Hey, it's Candus creator of Confidence with QuickBooks
and in today's QuickBooks tips and tricks,
I want to teach you about depreciation. So year end is coming and a lot of times
people want to know how do you enter the transactions you get
from your accountant into your QuickBooks so that they match.
So come look over my shoulder, and I will teach you how.
Okay, so the first step is to go into your chart of accounts
and the way you get there is list,
Chart of Accounts.
So what QuickBooks or what we really recommend doing is having
a main account called vehicles and then creating a sub-account
called
whatever your vehicle is. So if I, if you bought a Toyota Tundra, it would be there.
and then what we're gonna do is we're gonna actually put depreciation
below that.
So we're gonna go down to
add new.
So what the accumulated depreciation is, it's a contra account.
So what it does is it's basically
deducting it directly from that category.
So we're gonna create a fixed asset, and we're gonna call it
accumulated
depreciation
and the reason that we do it
below
your vehicle
is because
you, what you want it to do is you want it to take away
from the value of the Toyota Tundra.
So when you go in, you're gonna put in your depreciation,
the other side, it's gonna be accumulated depreciation,
and it will actually let you know,
it'll start removing it
from the value of the vehicle that you've added.
So then we're gonna add one more new one,
this one is gonna be an expense account
and this is gonna be depreciation expense
and you're gonna save and close it.
So now you have depreciation expense
and you have accumulated depreciation.
So those, that's how it works.
What you could also do below
is you could have Toyota Tundra,
and then you could have
original cost or original purchase amount,
and then the depreciation either way you can do it doesn't matter,
then what you're gonna do is at the end of the year,
your tax professional is gonna give you the depreciation,
you're gonna go under company,
make general journal entries,
you would pick the date that it was for,
usually it's gonna be the last day of the month,
or of the year,
month and year, I guess you could say,
and you're gonna go down and you're gonna pick
depreciation expense, which there is technically one already in there
I spelled them slightly different. That's why,
they make sure I got the right one.
Okay, so to get rid of that other one, let's go in and fix it real quick.
Cause I don't like it when I have too many of the same thing.
So here's the other one.
Sorry, that's my earring you hear maybe making a little bit of noise.
(laughs)
So I'm gonna merge these two real quick just so that I don't mess you up.
I could technically delete this part. But hey,
it a little extra. So I just make them spelled the same.
Save and Close, it will merge them.
Now, they're just one.
Okay, we'll go back into depreciation
expense and say that it was $1,000. I'm just putting an example in,
put a memo.
You know, your depreciation expense for and all that kind of stuff
that your tax professional will give you
and then your accumulated depreciation on that vehicle
and then if you hit save and close, what you'll see happen
is that now when you go to your chart of accounts,
you will see it now shows your actual value of that Toyota Tundra is only 14,000
but $1,000 is what's been written off under depreciation.
Okay, so that's how depreciation works. That was a question that I received.
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I will see you guys next week.
Have an amazing day
Take care.