Asset vs Expense
In this Video, we are going to be discussing Assets vs Expenses. We will show you how to categorize and sub-categorize your Quickbooks chart of accounts. We also discuss the difference of assets and expenses as in relation to which accounts does money spent by a company go into.
There are benefits to putting things into assets versus expenses and visa versa which can really help your company’s portifolio and what you pay on taxes.
If you are a new business and haven’t made much profit, minimizing what you expense this year will help you save tax money next year when profits are higher and therefore higher expenses can be used to offset.
Assets are also good because they give your company’s porftolio a better image by having more equity built into the company versus expenses. Having a forklift for example is not a full expense as the forklift is of some resale value. Each year you depreciate part of that forklift into an expense and still maintain some kind of equity year to year. Now any maintenance on that forklift or fuel will count for as an expense, not asset.
Why is this good? Another reason is that if you want to get a business loan, having equity will help more than showing expenses.
Return to: Learn Quickbooks