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Acquisitions

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To purchase fixed asset, first you need to create fixed asset you are purchasing:

1.Go to Fixed Assets tab.
2.Click New Fixed Asset button.
3.Enter details about new fixed asset.
4.Click Create button.
 

Once you create fixed asset, you will notice purchase cost will be zero. This is because in double-entry accounting system you can't simply enter purchase cost. Purchase cost is determined by the value of relevant transaction.

 

Purchase of fixed asset can be recorded under following tabs:

Bank Accounts (if paid by cash at bank)
Cash Accounts (if paid by cash on hand)
Expense Claims (if paid by you or someone else on behalf of the business)
Purchase Invoices (if purchased from supplier on credit)
Journal Entries (if purchased using loan)

 

When recording purchase of fixed asset under any of these tabs, categorize the amount spent to Fixed assets asset account, then select fixed asset you have purchased.

If you have purchased fixed asset using finance (e.g. car loan), you should also create liability account in your Chart of Accounts which will carry the value of this loan.

 

Then record journal entry which will debit Fixed assets account by purchase cost and credit loan account by the same amount. Repayments must be then categorized against loan account.