Читать книгу QuickBooks 2022 All-in-One For Dummies - Nelson Stephen L., Stephen L. Nelson - Страница 72

Straight-line depreciation, which I illustrate here, makes for a good example in a book. It’s easy to understand and to illustrate. Most accountants and business owners use more-complicated depreciation methods, however, for a variety of reasons. One of the most important reasons is that tax accounting laws generally allow for depreciation methods that accelerate tax deductions.

You can figure out the annual depreciation according to one of these tax-based depreciation methods with your tax adviser’s help. Different rules apply to different types of assets. The rules that you use for a particular asset depend on when you originally purchased the asset. I recommend that you use the same asset depreciation method in QuickBooks that you use for your tax accounting. Depreciation is complicated enough as it is. You don’t want to be using one method of depreciation within QuickBooks for your own internal financial management and another method for your tax returns.

While I’m on the subject of depreciation, I should also mention that many small firms have the option of using something called a Section 179 election. (Section 179 is a chunk of law in the Internal Revenue Code.) A Section 179 election allows many businesses to immediately depreciate 100 percent of the cost of many of their fixed assets at the time of purchase. Despite the fact that a Section 179 election means that you can immediately write off the purchase of, for example, a $24,000 delivery truck at the time of purchase, you still want to treat fixed assets expensed via a Section 179 election the way I describe here. The difference is that you’ll immediately show the asset as fully depreciated — which means depreciated down to its salvage value or down to zero.

Journal Entry 11 debits an expense account called “Depreciation expense” for $1,000. Journal Entry 11 also credits a contra-asset account called “Acc. dep. — delivery truck” for $1,000. (By convention, because the phrase accumulated depreciation is so long, accountants and bookkeepers usually abbreviate it as acc. dep.) Note also that you need specific individual accumulated depreciation contra-asset accounts for each specific individual fixed asset account. You don’t want to lump all your accumulated depreciation together into a single catch-all account. Down that way lie madness and ruin.