Bookkeeping Query - Equipment Purchase

phyonics

Hi all

I'll try and ask this as clearly as possible

I'm about to buy a till for my business, and my question is about recording that in my cashbook analysis.

I can see two ways of doing this and I don't know if one or the other or even a combination is correct.

Option 1 - Just record the expense in the payments part of the cashbook

Option 2 - Introduce the till as a business asset, and record it as such

I've read a small business accounting book and it uses an example of someone who introduces a car as an asset into a business but inherited the car rather than paying for it. In that situation it explains that you would record a 'capital introduced' receipt and also a contra entry as in effect no money has left the bank for the transaction.

So in my case, or indeed if you were paying for a car and then wanted to record it as a business asset what do you do? There certainly will be money leaving the account in that case, so it obviously needs to be recorded as a purchase, but is there something else that needs to be done at that time to show its become a business asset?

All help gratefully received.

Thanks

Marko

I'm confused

firstinflight

Normally, you would introduce the till onto your balance sheet as a fixed asset rather than charging it as an expense.

The double entry for this would be:

Debit Fixed Assets (plant and equipment) £x
Credit Cash £x

Acc72

How much is the till ?

Unless it is a significant sum, just post the cost to expenses.

It just starts to get unnecessarily complicated when costs are posted to fixed assets, as somebody then needs to work out the useful economic life and how much to depreciate each year etc.

Just keep it simple. Your main focus should be on your business rather than this level of accounting treatment.