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Chapter 17. Managing Assets > Accounting for Fixed Assets

Accounting for Fixed Assets

When you use QuickBooks to account for fixed assets, you group similar assets in a single account. For example, you might have one account for office furniture, another for computer equipment, and so on. As you purchase new assets, the cost of each new asset gets added to the appropriate account. If you purchase five office desks, each costing $400, your office furniture account increases in value by $2,000 (5×$400).

Depreciation expense for all assets is added to a single depreciation expense account. At the time that the depreciation expense account is increased, an accumulated depreciation account is increased by the same amount. The accumulated depreciation account is a type of asset account, but because its purpose is to offset the value of the assets by the amount of the accumulating depreciation, it is referred to as a contra asset account.


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