yo yo yo CPA strength here back with
another video this one is accounting for
beginners number 98 yeah I have 97 other
ones let go alright look we have a
complete accounting playlist of all my
accounting for beginners videos over
here so please look at this playlist and
really help you I have a bunch of things
DC ADE LER bunch of journal entries bunch
of everything in ninety ninety eight
videos so far if you're watching this in
the future I might have a couple hundred
in here
so anyways check that out I hope
everyone's having a great day you know
whether you want to be an accountant or
not whether you have your own business
whatever the case may be you're here to
learn about accounting I'm here to teach
it I love doing these I love helping
people
I love getting comments that I help
people I love comments for new questions
and please leave a like for the video it
really helps get my channel out there
and that's pretty much all I ask is to
just help me get my channel out there
and let's go this is a highly requested
topic and I've touched on this a couple
times for the videos but maybe now I'm
better a better orator a better better
telling how it is so I'm just going to
try to keep it very very basic and this
is just a general rule of thumb pretty
much with most tax and accounting there
are exceptions to the rule but this is
just a general rule of thumb and this is
based on a question I just got so thank
you very much for leaving a comment with
a question and anyways it is this is
this is basically how do you know
whether it's an asset or an expense
general rule of thumb is are you going
to use in your business for how long
less than a year it's going to be an
expense
more than one year it's going to be an
asset so I think the firt the first
thing is to think about spending money
from your business that will help make
money for your business so what I mean
is it's not a personal expense if it's a
personal expense if it's not for your
business it's going to be a withdraw or
shareholder distribution or maybe a
dividend even let's say you spend money
in hopes of making more money for your
business you spend the money in hopes of
making money for the business common
examples of that would be rent you spend
rent so you have a place to have your
office so you can make money from the
office insurance different types of
insurance you need to have insurance so
you can be safe when you're making deals
out there and protect yourself internet
you need the internet you need the
internet so you can search the web and
have web you know you need the internet
for your business you're gonna use the
internet for your business you buy a
vehicle so you can go maybe you have a
delivery service or something so you're
buying that vehicle so you can deliver
goods and make money office furniture
furniture for your office you need that
so you have place to sit for you and
your clients so you can make money
computer well you know you got internet
so you need a computer you need a
computer to do everything these days you
know all these is outgoing money in
hopes to make more for your business its
outgoing money for your business so we
got that established it's for the
business now the general rule of thumb
here so we have that established for
your business the general rule of thumb
in here is using business for how long
how long are you going to use in your
business general rule of thumb you use
it less than one year it's going to be
an expense you use it for more than one
year it's going to be an asset
briefly into if it's an asset assets are
depreciated I got a bunch of videos on
depreciation check those out if it's an
asset you're going to have a thing at
the end of the year called a
depreciation expense and you're going to
depreciate the value of the asset
equally over the time period that that's
going to last like you're gonna you're
gonna buy a vehicle you're gonna have a
vehicle for five five years of your
business so you're going to take
depreciation expense for five years as
opposed to because the whole thing is on
an annual basis you want to match the
income with the expenses and if you
spend you know twenty to twenty thousand
on a vehicle one year you're gonna have
a bunch of expenses you can have a bunch
of expenses and you're still going to be
using that in the next year's but you're
not going to have you know you're not
going to have an expense because you've
already expensed the whole thing but
you're still going to be using the
vehicle so that all these so you're
gonna have all the income you make from
the next year is not going to be able to
be deducted there's nothing to be no
expenses - not as much expenses to
deduct from the income so really an
asset if you have an asset that's longer
than a year you'll expense it every year
with the via depreciation expense and
it'll make the income and expenses more
matching more representative of the
actual business up for the year yeah I
don't want to go to I don't want to go
too long with this I probably went
longer and explain more than I really
wanted to but just think if you have
something if you have outgoing money
from your business in hopes of making
more money for your business or I need
something needed for your business to
operate
do you have it less than one year it's
going to be an expense do you are you
going to use it more than one
here it's going to be an asset this is
the video this is your one take Timmy
King I hope everybody's having a great
day a blessed day I'm doing better I'm
getting back in my zone
and anyways until next time I'm juices