how to enter expenses in quickbooks 2017

For example, if goods are sold in January, then both the revenues and cost of goods sold related to the sale transaction should be recorded in January. Under the matching principle, expenses are typically recognized in the same period in which related revenues are recognized. Reflects a payment not involving trade payables, such as the interest payment on a loan, or an accrued expense. Reflects the charging to expense of an asset, such as depreciation expense on a fixed asset.ĭebit to expense, credit to other liabilities account. Reflects a purchase made on credit.ĭebit to expense, credit to asset account. Reflects a cash payment.ĭebit to expense, credit to accounts payable. The accounting for an expense usually involves one of the following transactions:ĭebit to expense, credit to cash. If the amount paid had been higher than the capitalization limit, then it instead would have been recorded as an asset and charged to expense at a later date, when the asset was consumed.

The purchase of an asset may be recorded as an expense if the amount paid is less than the capitalization limit used by a company. Under the accrual basis of accounting, an expense is recorded as noted above, when there is a reduction in the value of an asset, irrespective of any related cash outflow. Under cash basis accounting, an expense is usually recorded only when a cash payment has been made to a supplier or an employee. If the expense is for an immediately consumed item, such as a salary, then it is usually charged to expense as incurred. If the underlying asset is to be used over a long period of time, the expense takes the form of depreciation, and is charged ratably over the useful life of the asset. An expense is the reduction in value of an asset as it is used to generate revenue.

How to enter expenses in quickbooks 2017