i want how to record expenses in quickbooks

That’s the back-story the “why” behind how you will enter this in QuickBooks. Instead of claiming the van as an expense in one year, you record a portion of the purchase price every year as an expense (depreciation), and spread it out over time. Depreciation is just a way to recognize the value that the van gives your business over time.Likewise, the depreciation is also an expense that reduces your profit and therefore reduces your taxes.The interest you pay on the loan is considered an expense that reduces your profit and therefore reduces your tax burden.The purchase of the van on its own is not an expense and therefore not tax deductible.The down payment on the van goes towards the purchase, and then the remainder is financed with the loan for which you have the principal and the interest expenses. You actually own the van (in other words, the entirety of its value should be on your balance sheet) and have a loan associated with it (which will also appear on your balance sheet as a liability). So how does this work in QuickBooks? When you create the new account for the transaction in the Chart of Accounts the account type is Fixed Asset or Other Asset.įurther, it sounds like you purchased the van with a loan. In other words, the van does not actually appear on your Profit and Loss statement. The past transaction is that you purchased it (with a loan).

As you may recall, an asset is something that has “future economic benefit as the result of a past transaction.” The future economic benefit is that you have a van to make deliveries and run your business. The delivery van is technically an asset (and not an expense), so if you record it properly in QuickBooks, it will show up on your balance sheet. (TL/DR: scroll down to Option 2: If you just want to get the damn transaction into QuickBooks) First of all, huge congratulations on growing your business to the place where you now need a delivery van!īefore I give you the process for entering the transaction, I want to explain the “accounting why”. Can I just put these as “car and truck expenses” (on the Profit and Loss), or should I do something different for depreciation?Īh, you thought this was a quick question. We paid $3,700 for the down payment, and now have monthly payments. We bought a delivery van this year, and I’m not quite sure how to deal with it on my QuickBooks.

I want how to record expenses in quickbooks