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Posted by Golden California Girls on June 27, 2006, 12:11 am
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HeyBub wrote:
> John Pippy wrote:
>> I am building quite a repertoire of questions for the accountant when
>> she returns from holidays.
>>
>> Hope someone in the meantime can help me with this one
>>
>> I purchase a computer for my business and pay for it out of company
>> funds $3800. Should I set this up as a fixed asset or just set up an
>> accumulated deprecation account and depreciation expense account and
>> credit and debit each the amount of depreciation?
>
> Ask your accountant. If you're making money, you may want to expense the
> whole thing. If you're not - or plan to make even more next year - you may
> want to depreciate. Depreciation simply moves the expense to subsequent
> years. (Sometimes you HAVE to depreciate, but not for a piddly $3800.)
>
>> Also, could someone briefly explain the effect of fixed assets on the
>> income statement and balance sheet.
>
> Fixed assets have no effect on the income statement. They are like any other
> asset on the balance sheet, that is, they sum into "Total Assets."
>
>> One final question, could someone or some people suggest possible
>> accounting books I could look at, I don't want to always be going to
>> an accountant for something that may be quite simple to address.
>
> Your very best course of action, bar none, is Bookkeeping 101 at your local
> junior college.
I don't think he can wait out a semester. Might look for a "For
Dummies" or "Made Simple" book. They won't make you an expert.
Hopefully they'll make you understand when you need to call your
professional and understand the answers.
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