QuickBooks 2005: The Missing Manual

Fixed Asset Items

Assets that you can't convert to cash quickly, such as backhoes, buildings, or the new Deep Thought supercomputers, are called fixed assets. If you track information about your fixed assets in another program or have only a few fixed assets, there's no reason to bother with the Fixed Asset Item List. As shown in Figure 5-7 the Fixed Asset Item list tracks information, such as when you bought the asset and how much you paid. But in QuickBooks Pro, you have to calculate depreciation (see the How Depreciation Works box) for each asset at the end of the year and create journal entries (page 364) to adjust the values in your asset accounts.

Figure 5-7. When you buy a fixed asset, you can create a Fixed Asset Item and enter its name and purchase information, where you keep it, the item's serial number, and when the warranty expires. When you create a Fixed Asset Item, QuickBooks doesn't automatically add the purchase price to the Asset Account you choose. As explained on page 272, the account you choose in your purchase transaction (check or credit card charge, for instance) is what adds the purchase price to the Fixed Asset account in your Chart of Accounts.

Note

QuickBooks Premier Accountant Edition and QuickBooks Enterprise Edition include the Fixed Asset Manager, which not only figures out the depreciation on your assets, but applies that depreciation to your fixed asset ...