Hello Sir, I have some queries and confusions,
1. I was wondering if equipments, utilities and supplies are the same thing... I mean if I create a category named 'Supplies' in the tabular summary and there's a transaction of equipments/utilities, can I put that transaction under that 'Supplies' category?
2. Where will 'purchase of Gasoline' go?
3. Delivery van is supposed to be an asset and I know the rule how to make adjustments when an asset is purchased in cash, but where will be the adjustments if the transaction is 'purchasing an asset/del.van on account?
Answers: Following are answers to the questions.
1. If whatever you create benefits you more than the current period, it will be an asset, otherwise an expense. So, equipments and supplies are assets as they usually benefit the company for multiple periods. As utility bill (eg. electricity bill) is paid every period and the benefit gets exhausted within the period, this is treated as an expense. All asset items should have separate columns. But all expenses should be recorded in the same expense column in Tabular Summary.
2. With the same logic mentioned above, purchase of gasonline for the delivery van would be an expense.
3. Increase in asset and on the other hand increase in liability (usually accounts payable if any other type is not mentioned, for example, a note payable).
1. I was wondering if equipments, utilities and supplies are the same thing... I mean if I create a category named 'Supplies' in the tabular summary and there's a transaction of equipments/utilities, can I put that transaction under that 'Supplies' category?
2. Where will 'purchase of Gasoline' go?
3. Delivery van is supposed to be an asset and I know the rule how to make adjustments when an asset is purchased in cash, but where will be the adjustments if the transaction is 'purchasing an asset/del.van on account?
Answers: Following are answers to the questions.
1. If whatever you create benefits you more than the current period, it will be an asset, otherwise an expense. So, equipments and supplies are assets as they usually benefit the company for multiple periods. As utility bill (eg. electricity bill) is paid every period and the benefit gets exhausted within the period, this is treated as an expense. All asset items should have separate columns. But all expenses should be recorded in the same expense column in Tabular Summary.
2. With the same logic mentioned above, purchase of gasonline for the delivery van would be an expense.
3. Increase in asset and on the other hand increase in liability (usually accounts payable if any other type is not mentioned, for example, a note payable).
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