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Assets and addition to or reduction of Owner's Equity

Posted by Gwen 
If Current Asset has been entered does it become Owner's Equity? And, if so, when value of Asset is reduced by Depreciation how does this reduce Owner's Equity?
Re: Assets and addition to or reduction of Owner's Equity
May 07, 2013 09:25PM
Not really, Equity is the difference between Assets and Liabilities.

It stays a Fixed Asset. Depreciation goes to Accumulated Depreciation which is also a Fixed Asset account and is offset by Depreciation Expense, an Expense Account.

You will get those figures from your CPA or Tax Preparer each year.

When you dispose of a Fixed Asset you will probably need to get the Journal Entry for it from your CPA or Tax Preparer as they keep a record of each Fixed Asset's depreciation.

You usually just get 1 entry for depreciation from them that includes the amount for all Fixed Assets.
Re: Assets and addition to or reduction of Owner's Equity
June 18, 2013 09:59PM
I am setiing up QB for a theatre. They bought a video camera last year. what type of asset do enter it as?
Re: Assets and addition to or reduction of Owner's Equity
June 24, 2013 06:03PM
Hello Samfro

All assets over about $500 go to a Fixed Asset account. (Ask your CPA what $ threshhold he wants you to use)

You can make a fixed asset account called "Depreciable Assets" and make sub-accounts for the type of Assets, i.e. Vehicles, Office Equipment, Buildings.

After setting up the accounts you would enter an asset by going to Accountant; Fixed Asset Item List, and entering all of the information on the asset.

You can then run a report on Depreciable Assets at the end of the year to give your CPA for depreciating the assets.

QuickBooks can automatically create depreciation by utilizing the Fixed Asset Manager under the Accountants tab but it requires knowledge of tax rules. Your CPA usually handles depreciation for smaller companies who do not have tax accountants on staff.

The best way to handle the fixed assets is to go to Accountant; Manage Fixed Assets

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