How to Set Up, Record & Calculate Depreciation in QuickBooks?

The accounting process involves a series of steps for recording transactional accounts for accurate bookkeeping. One of the methods of […]

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The accounting process involves a series of steps for recording transactional accounts for accurate bookkeeping. One of the methods of accounting is depreciation, which helps assign an actual value to the individual or company assets. Based on the span of usefulness, the costs are determined, be it for a tangible asset or an intangible one. The depreciation records the reduction in its value over the period of use.

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What is QuickBooks Depreciation Account?

The account is a fixed asset account, which is purchased for the long-term. Individuals and businesses can use such assets for as long as they want. However, the value of the asset decreases with time and level of usage. It is different from accumulated depreciation, which belongs to the contra account type, which is set up for reducing the value of the related account. For example, it reduces the cost of the fixed asset items on the balance sheet.

Why Set Up & Record Depreciation in QuickBooks?

Accounting depreciation in QuickBooks involves a series of steps, which when followed makes setting up, recording, and calculating the same easier and less time-consuming. Users need to create an account. They have a common Chart of Accounts tab that almost all versions of QuickBooks make available. This tab helps in setting up different accounts, including the one for depreciation.

As soon as the account is set up, the next step is to record the depreciation. After the data and figures are recorded, users can do the required calculations to proceed with the accounting-based decision-making.

How to Set Up Depreciation in QuickBooks?

There are different methods of setting up a depreciation account based on the type and nature of depreciation details to be recorded.

Method 1: Setting Up New Account

If you are a new user trying to set up a depreciation account in QuickBooks, the following steps will help you do that using the Chart of Accounts:

Step 1: Run the software.

Step 2: Choose the Gear icon.

Step 3: On the settings that appear, tap on Chart of Accounts.

Step 4: Click on New.

Step 5: Choose the Depreciation option.

Step 6: Select Next.

Step 7: A dialog box appears for users to enter the depreciation account name. Type in the name.

Step 8: Click Finish.

Your depreciation accounts gets set up.

Method 2: Setting Up Fixed Assets Depreciation in QuickBooks

If you are looking forward to setting up a fixed asset depreciation in QuickBooks, the following steps can help you:

Step 1: Click the Gear icon.

Step 2: Choose Chart of Accounts.

Step 3: Click New.

Step 4: Tap the dropdown.

Step 5: Select Account Type and choose Other Expense.

Step 6: Explore the Detail Type.

Step 7: Choose Depreciation.

Step 8: Give a name to the account.

Step 9: Click on Save and Close.

The accounts get set up.

How to Record Depreciation in QuickBooks?

Let us explore the different methods of recording depreciation in the software:

Method 1: Using Lists to Record Depreciation in QuickBooks

If you want to record depreciation in QuickBooks, you can follow the below-mentioned steps:

Step 1: Go to QuickBooks and log in.

Step 2: Choose the Lists options from the menu bar.

Step 3: Click on Charts of Accounts.

Step 4: Click on the sub-account twice. This helps monitor the accumulated depreciation account you want to convert into a depreciated one.

Step 5: Specify the depreciation amount for recording a transaction.

Step 6: Choose the Account option.

Step 7: Type in the expense account to be tracked for depreciation.

Step 8: Click Save.

Method 2: Using Lists to Record Depreciation in Mac QuickBooks Desktop Version

If you are a Mac user, follow the steps mentioned below to record the depreciation in QuickBooks:

Step 1: Open a window labelled QuickBooks Desktop for Mac.

Step 2: Tap on the Lists option.

Step 3: Click on Chart of Accounts.

Step 4: The sub-account to be tracked for depreciation should be chosen.

Step 5: Click the Action dropdown.

Step 6: Click on Use Register.

Step 7: Enter the depreciation amount as a decrease.

Step 8: Go to the Account field.

Step 9: Fill up the expense account to be tracked for depreciation.

How to Calculate Depreciation in QuickBooks?

As soon as the data is recorded for the required tracking of an account for depreciation, the next step is to calculate the depreciation. The steps to follow are mentioned above:

Step 1: Specify the details related to the fixed assets in question.

Step 2: Go for automatic calculation. It could be done using either of the following methods:

  • Straight-Line
  • Sum of the Years Digits
  • Double Declining Balance

Step 3: Choose the method that best serves your requirements.

Step 4: Save the details of each asset once the calculation is done for them.

The steps above have been clearly stated. However, there might be instances where users can get stuck in carrying out the steps. We completely understand your issues and hence we make our professionals available for instant guidance and assistance.

Whether you want to understand the different types of calculation methods or you desire to get help in performing the steps of setting up and recording the depreciation value in QuickBooks, our technical executives will help you deal with everything.

Our people are available 24/7 and hence, You can connect with Dancing Numbers experts via LIVE CHAT. They will either guide you over the call or ask for remote access to your system to conduct the process of setting up, recording, and calculating depreciation in QuickBooks on your behalf.

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How to Set up Depreciation in QuickBooks Online Manually?

If you want to set up the depreciation account in QuickBooks Online manually, here are the steps to follow:

Step 1: Open QuickBooks Online, Choose Settings.

Step 2: Tap the Gear icon and Choose the Chart of Accounts tab.

Step 3: Click on New & Go to the Account Type dropdown after that Select the Other Expense option.

Step 4: Click the Detail type dropdown, Choose Depreciation.

Step 5: Give a name to the Account.

Step 6: Click on Save and Close.

How do You Record Depreciation in QuickBooks Online Manually?

If you are looking forward to recording depreciation in QuickBooks Online manually, the steps are given below:

Step 1: Launch the software, Click +New.

Step 2: Choose Journal Entry & Check the Account dropdown.

Step 3: Select the asset count for tracking it for depreciation.

Step 4: In the Credits column, type in the depreciation amount.

Step 5: From the Account option in the second line, choose the QuickBooks depreciation account created.

Step 6: In the Debits column, enter the matching depreciated amount and Click on Save.

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Frequently Asked Questions

 
How and What all can I Export in Dancing Numbers?

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You can export a Chart of Accounts, Customers, Items, and all the available transactions from QuickBooks Desktop.


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To use the service, you have to open both the software QuickBooks and Dancing Numbers on your system. To import the data, you have to update the Dancing Numbers file and then map the fields and import it.


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In the Delete process, select the file, lists, or transactions you want to delete, then apply the filters on the file and then click on the Delete option.


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Is it possible to use the Direct Connect option to sync bank transactions and other such details between Bank of America and QuickBooks?

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What are the various kinds of accounts you could access in QuickBooks?

QuickBooks allows you to access almost all types of accounts, including but not limited to savings account, checking account, credit card accounts, and money market accounts.

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