4. Making depreciation journal entries
Depreciation is the reduction in value of an asset due to wear and tear after it has been in service for a period of time. To reflect the reduced value, you must record the depreciation expense in your books. Depreciation is also a tax-deductible expense, which can help to reduce your overall tax liability. After adding fixed assets to QuickBooks, you need to record depreciation expenses for the period. Unfortunately, QuickBooks does not compute depreciation for you. Therefore, you will need to calculate depreciation manually, or have your accountant do this for you. In the Recording journal entries section of this chapter, we will show you how to record journal entries in QuickBooks.
