• From: USA
  • Registered: 03/26/2013
  • Posts: 93

Topic: buying tools and equipment

What is the proper way to register tools?
I know tools are capital assets but they are also an expanse. If I make a payment and select 1821 Tools and Equipment from charts of accounts i notice that my checking account gets deducted for the amount, but i can not seems to find the expanse under Profit & Loss Drilldown.
What am I missing?

  • joe
  • Administrator
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: buying tools and equipment

Check that your account 1821 is belonging to the correct account group.

Joe

  • From: USA
  • Registered: 03/26/2013
  • Posts: 93

Re: buying tools and equipment

it's under Capital Assets

  • joe
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: buying tools and equipment

Tools and Equipment is here an inventory account (assets). Expense accounts for minor tools are placed in Expense and should be used for minor purchases.

Joe

  • From: USA
  • Registered: 03/26/2013
  • Posts: 93

Re: buying tools and equipment

but if you buy a 10k tool, that's an asset but also an expense. how would you write that off at the end of the year? how would you calculate/enter the depreciation of the tool over time...
same think with a vehicle; down payment, monthly payments, miles depreciation ...

  • joe
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: buying tools and equipment

In this case you buy the tool by entering the asset account. At year end (or periodically) you do your depreciations on a depreciations account.

Please talk to a local accountant for these type of questions.

/Joe