http://www.norwalk-cpa.com/accounting-how-does-equipment-and-tool-purchases-appear-in-a-general-ledger/ A Norwalk, CA Accounting Groups Sun, 21 Mar 2010 02:48:14 +0000 hourly 1 http://wordpress.org/?v=abc http://www.norwalk-cpa.com/accounting-how-does-equipment-and-tool-purchases-appear-in-a-general-ledger/comment-page-1/#comment-1295 Ryjasu Wed, 30 Dec 2009 13:50:06 +0000 http://www.norwalk-cpa.com/accounting-how-does-equipment-and-tool-purchases-appear-in-a-general-ledger/#comment-1295 Generally, if the equipment is going to be used for more than one year, it is placed on the balance sheet as an asset and depreciated over its useful life. Say the company buys a computer for $2000 and its expected useful life is 5 years. Put it on the balance sheet as an asset and for each of the 5 years, you reduce the balance of the asset account using the contra-asset account 'Accumulated Depreciation - Office Equipment' and allocate $400 to the expense account 'Depreciation Expense - Office Equipment'. Generally, if the equipment is going to be used for more than one year, it is placed on the balance sheet as an asset and depreciated over its useful life. Say the company buys a computer for $2000 and its expected useful life is 5 years. Put it on the balance sheet as an asset and for each of the 5 years, you reduce the balance of the asset account using the contra-asset account ‘Accumulated Depreciation – Office Equipment’ and allocate $400 to the expense account ‘Depreciation Expense – Office Equipment’.

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