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Where do you enter depreciation

I need to enter some depreciation on to quickfile. I can’t seem to figure out how to do this other than to enter it as a transaction on my current account but then this means I lose track of my account balance and potentially my assets are logged incorrectly

Would be most grateful if someone could walk me through another way of accounting for depreciation if one exists

You use a journal to record depreciation.
Debit the depreciation expense account and credit a depreciation balance sheet nominal.

Thanks for responding Paul!

I read about these journals in some other threads but I don’t seem to be able to see them on my account. Is this something that I need to set up? And guessing I need to set up a depreciation expense account too?

Sorry as I’m sure you can tell I am no expert!

Journals are under “reports” in QuickFile, which I agree isn’t the most obvious place to find them. Essentially a journal is simply a way to move money around any of your nominal accounts, the only condition is that the total debit and total credit amounts on the journal must be equal.

If you go to reports -> chart of accounts, and expand out the “assets and liabilities” section, you should find that each of your default asset codes has an associated depreciation code:

and under overheads there may also be another set of matching codes (I have had my QuickFile account a long time, I’m not sure whether more recent accounts get the full set of default nominals that were in place when I first set mine up).

The way depreciation works it effectively moves a portion of the asset value off your balance sheet each year and puts that value into that year’s P&L as an expense. All you need to do once you know how much depreciation you want to record, is create a new journal (reports -> journals) that does a credit to the “assets & liabilities” depreciation code (e.g. 0021) and a matching debit to the “overheads” code (8001). I normally date depreciation journals on the last day of the relevant accounting year. When you look at your balance sheet you should see the relevant “accumulated depreciation” line go up by the amount you entered and the “net book value” line go down, and the same amount will be added to your overheads for the year, reducing your net profit.

Ian you are a super star. Thank you so so much! Glad I’m not the only one who thinks the journals aren’t too obvious :slight_smile:

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