Are you wondering how to record a vehicle trade-in QuickBooks? If so, we will enlighten you through this detailed guide.
QuickBooks users have the capability to handle transactions for fixed assets. It includes machinery, cars, buildings, and others. You may also track depreciation on such assets. By using Tracking Depreciation, you can decide if you should retain the asset or sell it ahead. Thus, it is important to keep track of movable or immovable assets in QuickBooks. Let’s know more in detail.
Before you handle transactions for fixed assets such as cars, one should be aware of the idea of Fixed Assets and Depreciation.
Fixed Assets: If the assets are purchased for the long term, they are called Fixed Assets. It includes cars, land, machinery, printers, and other items. Such assets can be used regularly. However, fixed assets are pretty expensive than variable assets.
Depreciation: If the value of a variable or fixed asset reduces over a period of time, it is known as Depreciation. Moreover, you can calculate the depreciation only on fixed assets as they are costly.
To record the purchased vehicle or other fixed assets in QuickBooks, you are required to perform a number of steps. First, you will have to create an account for the fixed asset (for vehicles), add the vehicle you have purchased, and then set up the liability account.
There can be instances when the purchase of the fixed asset comes with associated liabilities such as EMI and loan payments. To record the transaction properly, you can enter and track the liability (Long Term Liability Account).
To set up your liability account, you can pursue these steps:
This is how you can create the fixed asset account, add the purchased vehicle to the fixed asset account, and then create the liability account.
In QuickBooks Desktop, vehicle purchases can be recorded by adding the information manually such as the amount of the vehicle. Let’s know how to record a vehicle trade in QuickBooks Desktop.
By doing so, you can easily record the vehicle trade in QuickBooks Desktop. All you have to make sure that you create the fixed asset account first so that you can add the vehicle details to it.
If you use the online application of QuickBooks, the process of recording a vehicle purchase can be different. To know how to record a vehicle trade in QuickBooks Online, check out these steps:
This way you can record or save the vehicle purchase to your QuickBooks Online account. It only requires you to provide the details for Purchase Information and Asset Information sections.
To create a vehicle loan purchase, one has to add the account details including the check number or EFT. Follow these steps to understand better.
Once you are done entering all the necessary information then you can click on the “Save and Close” button. This will keep the information saved.
In case you wish to create a loan for a new vehicle then you need to set up a new account. Carry out these steps to set up a new vehicle loan in QuickBooks Online.
You can leave the “Unpaid Balance” field blank. Once done entering other details, save the information by clicking on the Save button.
Loan entry is important to complete the vehicle purchase record. Thus, we will show you the procedure of recording the loan amount. You can enter the loan amount and depreciation by adding simple journal entries. Here are the steps for that.
This will add the loan entry on both the Debit or Credit side. Similarly, you can record each payment that is made for a loan. You can do it by entering the check and linking it to the loan.
Users will have to create journal entries so that they can track depreciation properly. Also, remember that users can calculate the depreciation themselves. You have now learned how to record a vehicle trade in QuickBooks.
In a Nutshell
The procedure of recording the QuickBooks trade in vehicles is quite easy. Once you understand the meaning of fixed assets and depreciation, you can easily record the vehicle purchase in QuickBooks Desktop and QuickBooks Online.
Besides that, we have discussed the procedure of recording vehicle load purchase, setting up new vehicle loan, record loan amount & depreciation in QuickBooks.
We hope you find this guide helpful.
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You can enter a vehicle purchase as a related expense. In QuickBooks Online, you can do so by hitting the icon “Plus (+)”. Then tap on the “Check” option. After this, you will be asked to provide some information. When you are done, please move to choose a bank account. Then in “Category”, the amount of the purchase can be entered.
Companies that are involved in the trade of vehicles often need to enter a record. QuickBooks is the accounting software that enables you to add vehicle trade details in it. How many vehicles have been sold and the expenses related to these can be recorded for any reference in the future.