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Mummieking
April 24, 2019
Question

I've entered recent fixed assett purchases and then entered depreciation as a journal entry but I can't see any depreciation line on my P&L? Have I done something wrong?

  • April 24, 2019
  • 2 replies
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    2 replies

    Bonny_
    Bonny_
    April 24, 2019

    Hi Mummieking,

     

    Thanks for reaching out! 

     

    For the journal entry, what accounts are you debiting and crediting? When you record depreciation, you first have to ensure that a depreciation expense account is created in the Chart of Accounts. Here is how you create the account:

    1. Go to the Chart of Accounts
    2. Click New, and select Other expenses under Account Type, and Depreciation under Detail Type.
    3. Name the account Depreciation expense, and Save.


    I am also assuming that you have created a Chart of Account for the Fixed Asset and ticked the "track depreciation of this asset" option. Here is how you set it up: 

    1. Choose Gear Icon > Chart of Accounts.
    2. On the top right click New.
    3. Under the category type select Fixed Asset.
    4. Select the detail type of asset (if none pertain select the closest and proceed).
    5. Name the account.
    6. Tick the box Track depreciation of this asset, if you wish to track depreciation (If you tick the box system will automatically create a Depreciation subaccount for the item).
    7. Fill in the original cost fields. (If recording the loan, please leave this blank.)
    8. Click Save and Close.

    When you create the journal entry, you Debit the Depreciation expense account, and credit the Accumulated depreciation account of the fixed asset.

     

    After doing all this, run the P&L report and the depreciation expense would show up.

     

    You can read more about setting up your fixed asset accounts for depreciation here: https://quickbooks.intuit.com/community/Reconciliation/Recording-and-depreciating-assets/m-p/262909/highlight/true#M37

     

    Let me know if this helps! 

     

    Bonny

    M
    MummiekingAuthor
    April 24, 2019

    Thanks for your quick reply Bonnie!

    The devil is in the detail hey? I did everything correct up until the credit entry, based on QB help listed below which I obtained in the search box:

     

    At the end of the year when you or your accountant have calculated the depreciation amount, enter the transaction:

    1. Go to the Gear Icon tab and click Journal Entry.
    2. In the first line:
      • For Account select your depreciation expense account.
      • Under Debits list the amount of the depreciation.
    3. On the second line:
      • For Account select the asset account you are Depreciating.
      • Under Credits, list the amount of depreciation.
    4. Click Save

     

    Worded slightly differently so I entered it into the wrong spot- your direction is slightly clearer I will alter now thank you!!!  So basically there needs to be deprecation account AND an accumulated deprecation account for each asset?

    Bonny_
    Bonny_
    April 24, 2019

    Hi Mummieking,

     

    Glad that helped you out! You will need to create an accumulated depreciation account for each asset, which is automatically created when ticking the "track depreciation for this asset" option. It would be helpful to also create a depreciation expense account for each asset, just so you can track them separately easily, although it's not required.

     

    Bonny

    E
    evolross
    March 10, 2020

    I had this same issue. Make sure when adding the Journal Entry that you're crediting the depreciation sub-account of the fixed asset and debiting a global Deprecation expense account. NOT the Original Cost or Fixed Asset accounts.

     

    If you don't debit an actual expense account it won't show up in your P&L. See this short YouTube video for how to do this - pay careful attention to the accounts she chooses.

    Depreciating an Asset with QuickBooks Online

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