Quickbooks 2019 Tutorial for Beginners - How to Record Depreciation Expense

QBUniversity.org - In this Quickbooks 2019 tutorial for beginners I walk through how to record depreciation expense.
Depreciation expense is often recorded at year-end by an accountant or tax CPA. The problem with this is that it creates a large expense in December, which distorts your financial statements. This video walks through how to easily calculate it so you can record it throughout the year using Memorized Transactions.
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[@arbeeherrera7141]

Thank you so much!! This is exactly what I was needing help with! I appreciate it!

[@QbuniversityOrg]

You’re welcome!

[@GeoffWells]

Excellent tutorial! Thanks!

[@QbuniversityOrg]

Geoffrey Wells you’re welcome!

[@georgebustos2059]

Thanks for the video. How does the accumulated depreciation in the fixed asset list get incremented per asset?

[@alisonmaloof3966]

Than you for the video! New business owner, very helpful. If I am trying to depreciate an item for example a laptop purchased for $894.80 on 9/27/2020, would you recommend to create my first JE for one month of depreciation on 10/27/2020 or 10/31/2020? Or for example furniture purchased 9/21/2020. Thank you!

[@stanleydueck4904]

Thanks for the video! Can I add fixed assets that are paid for long ago? I need to add some fixed assets for depreciation purposes, can it be done without touching bank accounts?

[@pettycashweb]

Is it done? Or should i click ‘save’ after every month ? Because every time I click on memorized depreciation it post entry with consecutive months date and ask to save it. And It is even not restricting ‘number remaining’. I can go even beyond that number. Kindly clarify.

[@brittanychan7438]

Thank you for this! Is there a way to record depreciation if assets are lumped together? I bookkeep for a rental company and they have ATV’s, UTV’s, Seadoo’s, and Sled’s. But they are in those groups instead of each separate machine being an asset. I am doing a recovery so I need to enter depreciation for the last 4 years and cannot change how the accounts are arranged. Thank you for your help 😊

[@QbuniversityOrg]

Yeah you certainly can. It's not going to be exact of course because you don't have the placed in service dates exactly for each individual assets, but I would take each group, determine a placed in service date and then depreciate the group

[@JOSEGONZALEZ-wx9fb]

Excellent tutorial. I have a question though. Lets say I have two desks and and some office chairs, should I calculate de depreciation for each of those assets individually and make a journal entry for each depreciation expense or should I calculate de depreciation for all of them together and make only one journal entry, assuming that all of these assets will depreciate in 7 years.

[@QbuniversityOrg]

Just do one entry for all of it

[@JOSEGONZALEZ-wx9fb]

@@QbuniversityOrg Thank you very much.

[@QbuniversityOrg]

@@JOSEGONZALEZ-wx9fb welcome!

[@JohnnyMcCore]

Thanks for the video! What happens it you need to sell the asset?

[@QbuniversityOrg]

Johnny McCore you would have to take the asset and accumulated depreciation off the books and record any gain or loss

[@timothykimball8774]

How would you record the original payment for the asset? So say you buy the desk with you debit card and you’re categorizing your expenses on your bank feed, what would you do with that $3500 charge if you will be writing it off per month with the fixed asset?

[@QbuniversityOrg]

Timothy Kimball when you originally purchase it you would put it just to a fixed asset account

[@insertname8511]

This is only straight line. Can I have Quickbooks calculate automatically the monthly depriciation expense if i'm using double declining balance or sum of the years digits?

[@QbuniversityOrg]

Unfortunately no. You would need to create an entry for that each month, or memorize one, then change the amounts each month

[@insertname8511]

@@QbuniversityOrg ah ok because most of my clients prefer accerletaed depreciation methods so that's a shame. Thanks for the response

[@abreeasbury7635]

How do I fix the chart of accounts "fixed assests" if it's a large negative number? We have a vehicle totalled years ago and it has always been negative since then

[@QbuniversityOrg]

You’ll have to go back and see what was done to know how to fix it

[@tshiamokoma]

beautiful.. as i subscribe..

[@QbuniversityOrg]

Awesome thanks!

[@rameez328]

lets say you sold the asset by 36 months . how do you stop the automatic transaction.

[@QbuniversityOrg]

Pull up your list of auto transactions, and delete that one or edit it to make it not enter automatically

[@potomacvalleyorganics8115]

Subscribed. Ancillary question about the Fixed Asset Item List. Even though I assign the "Asset Account" to the one I created in the chart of accounts, does that actually do anything? For me it doesn't seem to.

[@QbuniversityOrg]

Nope it doesn't...at least not in the financials or in an account. It's a way to track your actual fixed asset detail.

[@potomacvalleyorganics8115]

@@QbuniversityOrg One more question. I see how you schedule future journal entries for depreciation by making an entry and clicking "memorize." Can you schedule the first journal entry for a future date without making a journal entry that occurs today or before today? That is, I want to set my very first depreciation entry for next month, without having to remember to enter it next month.

[@QbuniversityOrg]

@@potomacvalleyorganics8115 yeah you should be able to enter the journal entry with a future date when you put it in and memorize it to make this happen

[@gamesforusinc]

I have a couple of questions about the Fixed asset. You mentioned not to put the items as a Fixed Asset and treat it like an expense if it is under $2500 (Law per invoice.) So then there is no point in setting up the Depreciation Expense in QB? I looked at our total value of Furniture and Equipment as it is over $20,000 in expenses over the coarse of a few years. Thank you!!!!

[@QbuniversityOrg]

J B you’re welcome! What is the question?

[@gamesforusinc]

@@QbuniversityOrg It looks like we have to switch all of our furniture from expense back to Fixed Assets in order to use this Feature you have posted. But there is no point if each invoice is under $2500 so it is best to just leave everything as an expense? Sorry, i noticed I was not very clear with my question.

[@QbuniversityOrg]

J B ah gotcha. And if you did it a certain way on prior tax returns I definitely wouldn’t change those.

[@waynel8645]

I fly drones Professionally how would I depreciate the drone in one year? Expensing under IRC Section 179 and bonus depreciation

[@QbuniversityOrg]

Wayne Luedtka yep that’s exactly right. There are certain rules around each of those and when you use them, but in general yes you would use 179 and 100% bonus depreciation.

[@stanleydueck4904]

Why does my book value and accumulated depreciation not show in the fixed assets item list? Although the depreciation shows in my reports! I did everything as shown in this video...

[@stanleydueck4904]

I have the colums there, they are blank, they don't show the numbers

[@marywilliams3672]

When you do your memorized transaction, how does this reduce the book value of the asset you are depreciating

[@QbuniversityOrg]

The Accumulated Depreciation is a contra asset account that reduces the book value

[@marywilliams3672]

@@QbuniversityOrg Thank You

[@QbuniversityOrg]

@@marywilliams3672 you’re welcome!

[@fofosport85]

Thx for the video but depreciation rate depend on the business and other factors I I have a truck/ bus its life will be much longer hems depreciation will be 10% a year Other examples on machines and equipments if you operate next to a beach with high humidity the life span of the asset is shorter and I will say 25% a year

[@QbuniversityOrg]

Yep, but this video was about how to record depreciation expense in Quickbooks and not necessarily how to determine the useful life of an asset

[@fofosport85]

@@QbuniversityOrg I am happy to get imediate response it will be great if you advice me and other on asset recording as I did tried to add and assign a class against each entry. I got disappointed when I tried to depreciate assets all went to main class. Do we have a solution to that matter?

[@chewie1355]

Thanks 4:18

[@QbuniversityOrg]

Chewie 13 you’re welcome!