HOW TO CREATE A FIXED ASSET ACCOUNT

1. Click Company tab on QuickBooks Navigator. Click Chart of Accounts Icon.

2. Click Accounts box. Choose New. Tick mark Fixed Asset (major purchase)

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3. Fill In the needed information.

Type: Fixed Assets (Selected from dropdown list)
 Name: Hardware and Equipment (Name of your Fixed Assets)
Description: 2021 Laptop Computer
Opening Bal: Leave the opening balance at 0.00. Do not worry about the
date.
4. Click Save & New to create a Cost Subaccount for this asset.

HOW TO ADD A COST SUBACCOUNT FOR AN ASSET

This subaccount will monitor your acquisition cost and other cost to upgrade
the asset. 1. Fill in the needed information.
Type: Fixed Asset
Name: Cost
Description: Acquisition Cost
Check the subaccount checkbox. Select the name of the asset: Hardware and
Equipment.
Opening Bal: 100,000 as of 07/25/2021. (Actual cost and date of
acquisition)
2. Click Save & New to create an Accumulated Depreciation Subaccount
for this asset.

Have you been shown how to create the above related accounts? Yes No Sig

HOW TO ADD AN ACCUMULATED DEPRECIATION SUBACCOUNT

This subaccount will monitor your total depreciation on this asset.

1. Fill in the needed information
Type: Fixed Asset
Name: Accumulated Depreciation
Description: Accumulated Depreciation
Check the subaccount checkbox. Select the name of the
asset: Hardware and Equipment
Opening Bal: Leave this blank for the moment. We will have an exercise
on this. 2. Click Save & Close. Close Chart of Accounts box.
Have you been shown how to create the above related accounts? Yes No Sig.

HOW TO RECORD A DEPRECIATION EXPENSE OF FIXED ASSET

Most companies depreciate their fixed assets at 20% of their cost every year for 5
years. We will depreciate the value of the Laptop Computer based on this computation.
Acquisition Cost (100,000.00) divided by 5 years = 20,000.00/ year depreciation. For
this particular exercise, let us record the half year depreciation for 2021 at the end of the year.
Here is how to record this depreciation expense.
1. Click Company tab on QuickBooks Navigator. Click Chart of Accounts icon.
2. Choose the Accumulated Depreciation subaccount of the fixed asset we are going to
depreciate which is the Hardware and Equipment.
3. Double Click Accumulated Depreciation.
4. Fill in the needed information.
Date: 12/31/2021
Decrease Amt: 10,000.00
Account: Depreciation Expense. (Selected from dropdown list) Memo: 2021 Depreciation.
5. Click Record.
6. Open the Chart of Accounts. Go to Hardware and Equipment account.
7. We will notice that the book value has been decreased but the cost is still the same.
Note: Additional cost or upgrade like the aircon will be included in the depreciation expense on 2021 at the
same rate of 20% over 5 years.

Have you been shown how to record this depreciation of fixed asset? Yes No Sig.

111 = SHOULD REMOVE

111 = CHANGED