Contra Asset Account

[Derek Atkins]

Hi,

Community <Community at MMHein.at> writes:

> Hi,
>
> How would I create a contra asset account in Gnucash (2.6.4)?
>
> This would be an asset account where all the accumulated depreciations
> will get records instead of crediting these directly to the
> corresponding asset accounts.
>
> Major difference between a contra asset account and a regular one is
> that the former is having a credit balance, whereas the latter one is
> having a debit balance.
>
> Would this be accomplished by assigning account type "liability" to
> the contra asset account?

No, I think you just create an account of type asset that will generally
be negative.

> Example journal entries:
>
> (01) Dr. Buy equipment (A) current assets 100,000.00
> 	Cr. Pay equipment (A) cash 100,000.00
>
> (02) Dr. Equipment Depreciation (E) depreciation expenses 10,000.00
> 	Cr. Depreciate equipement (XA) accumulated depreciations
> 10,000.00
>
> On the balance sheet the accumulated depreciations would then get
> subtracted from the assets.

The balance sheet puts liabilities "elsewhere", which is why you want
the account type to be Asset.

> - Martin

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-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
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