4. Making depreciation journal entries
After adding fixed assets to QuickBooks, you need to record depreciation expenses for the period. As established earlier, depreciation is the reduction in the value of an asset, due to wear and tear after it has been in service for a period of time. To reflect the reduced value, you must record the depreciation expense in your books. Depreciation is also a tax-deductible expense, which can help to reduce your overall tax liability.
As mentioned previously, if you subscribe to the QBO Advanced plan, QuickBooks will automatically compute and record depreciation for you. However, if you don’t have QBO Advanced, you will need to calculate depreciation manually or have your accountant do this for you. In the Recording journal entries section of this chapter, I will show you how to record journal entries in QuickBooks.
If you do have QBO Advanced, please refer to the online chapter, Chapter 21, QuickBooks Online Advanced, available...
