[verystuck80]

What is the initial entry that a fixed asset will be. I have entered the invoice of the fixed asset but have had to post it to a suspense account purely because our system doesn't allow you to post directly to a fixed asset account. I now need to journal out the suspense so there is a zero balance but I am not sure whether the DR entry should go. I am guessing that it should be in the asset account under fixed asset? Then when I do the depreciation I DR the depreciation expense account and CR the accumulated depreciation account? Please help.

[morgaine300]

You do want to put it with fixed assets if that's what it is. That's a sub-category of assets. How detailed about it is up to you and how much information you want to have. You didn't say what it was but... you can have main categories under your fixed assets such as Machinery, Equipment, Furniture & Fixtures, Automobiles, etc. You can split down further, for instance if part of your office equipment is computer stuff, you can have a separate account for Computer Equipment. That is all up to you.

You can also lump everything together by major categories and just keep a separate record somewhere of the details of each thing. (You should have an itemized list of each thing somewhere anyway, so that you have all your purchase info, dates, depreciation info, etc.) You can even just lump everything into "Fixed Assets" and leave it at that.

Whatever you do, it's a debit. And make sure you've included all costs incolved, not just the price, but anything that was required to get, install, prepare, etc. the asset, including but not limited to shipping costs, taxes, insurance (in transit), etc.

I'm curious what software wouldn't let you originally charge it to a fixed asset category. That's a little weird. And speaking of the software, how you do this might be limited to what the software will let you do. Just always be sure to keep more detailed internal records.

Oh, and your depreciation entry is fine. Do you know how you want to depreciate it?