WHEN AN ASSET IS PURCHASED THE BALANCE OF MONEY/LOAN ACCOUNT USED TO FINANCE THE PURCHASE OF THE ASSET IS REDUCED AND THE VALUE OF ASSETS INCREASED.
THE ASSET ACCOUNT TAKES ACCOUNT OF ITEMS OF HIGH VALUE WHICH ARE TRANSFERABLE INTO CASH. SO THE POSITION OF THE COMPANY OR THE VALUE OF THE COMPANY HAS NOT CHANGED IT IS MERELY THAT MONEY HAS CHANGED FROM A BANK BALANCE INTO AN ACTUAL ITEM OF HIGH WORTH (I.E. A FIXED ASSET).
FIXED ASSET ACCOUNTS AVAILABLE WITHIN THESAURUS ACCOUNTS ARE:
- VANS & TRUCKS
- FIXTURES & FITTINGS
- PLANT & MACHINERY
- OFFICE EQUIPMENT
- OTHER FIXED ASSETS
PURCHASE OF AN ASSET
When an asset is purchased, an invoice is issued by the supplier of that asset. Post the purchase invoice the same way as any other purchase invoice selecting the relevant asset account from the list.
PURCHASES > BATCH ENTRY
This is the internal reference that will cross reference the physical invoice to the transaction entered on screen.
Date of issue of the invoice as displayed on the invoice.
Select a Supplier name from the list of Suppliers (F2) who issued the invoice to you.
Set up New Supplier during transaction entry
If the purchase invoice is from a new Supplier who does not already exist within the Supplier listing then simply type the Supplier name into the "Supplier" field.
The program will recognise that the Supplier does not already exist within the Supplier listing and give you the option to set up the Supplier.
This is the supplier's invoice number as displayed on the invoice to facilitate future cross reference for any queries on the account and to reconcile the closing period balance to the statement.
The narrative is an optional field and can be completed if required. It would be advisable to use this field to record a brief description of the asset purchased.
Choose the appropriate Asset account.
If the Asset account is not available for selection from the list then the user must go to Setup> Show/ Hide Nominal Accounts> and flag the asset account for view within “Purchases”.
Enter the Gross cost as per the invoice
Select the appropriate VAT rate using the arrow up and down keys on the keyboard. The VAT element will be brought through to the VAT report for reclaiming in the next VAT return.