How to Record the Purchase of a Fixed Asset
Fixed assets are those items that you can’t immediately count as an expense when purchased. QuickBooks 2012 can help you record and track your fixed asset purchases. Fixed assets include such things as vehicles, furniture, equipment, and so forth.
Fixed assets are tricky for two reasons: Typically, you must depreciate fixed assets, and you need to record the disposal of the fixed asset at some point in the future — for either a gain or a loss.
Accounting for the purchase of a fixed asset is pretty straightforward. Here is how a fixed asset purchase typically looks.
If you purchase a $12,000 delivery truck with cash, for example, the journal entry that you use to record this purchase debits delivery truck for $12,000 and credits cash for $12,000.
Within QuickBooks, this journal entry actually gets made when you write the check to pay for the purchase. The one thing that you absolutely must do is set up a fixed asset account for the specific asset. In other words, you don’t want to debit a general catch-all fixed asset account.
If you buy a delivery truck, you set up a fixed asset account for that specific delivery truck. If you buy a computer system, you set up a fixed asset account for that particular computer system. In fact, the general rule is that any fixed asset that you buy individually or dispose of later individually needs its own asset account.
The reason for this is that if you don’t have individual fixed asset accounts, later on the job of calculating gains and losses on the disposal of the fixed asset turns into a Herculean task.