Query re recording a computer purchase as a fixed asset

[Buddha Buck]

Your confusion I think is in step 2 (Record the invoice as a bill in
Accounts Payable). Functionally, posting a bill acts like a normal
transaction, so it has two accounts, A/P and something else. That
"something else" is the Asset Cost account the tutorial is talking about.

So in the scenario you are presenting, the order of events should be:

1) Agree to purchase the computer.
2) Receive the bill (and the computer)
3) Enter the bill into GnuCash
4) Pay the bill

When you enter the bill, each line-item in the bill may be charged to a
different account. Let's say there are shipping fees and sales tax on the
bill in addition to the computer (and let's say the computer cost $5000).
You would input the invoice with three line-items, and when you post it, it
would create a split transaction looking something like:

2015-02-06 Purchase new server for back office
  Debit Asset:Fixed:Computer Server $5000
  Debit Expense:Shipping $25
  Debit Expense:Tax:Sales Tax $400
  Credit Liabilities:Accounts Payable $5425

When you pay the bill, you will debit Liabilities:Accounts Payable, and
credit Assets:Bank.

2015-02-08 Pay Acme Computer Works Invoice #12345
  Debit Liabilities:Accounts Payable $5425
  Credit Asset:Bank $5425

I'm not sure the tutorial was written with the use of the "Business
Features" in mind; as such, it may not be expecting the use of invoices,
bills, and A/R and A/P. Without using the invoices/bills features, you
probably wouldn't be using an Accounts Payable account either, so
ultimately you would only have one transaction, not two:

2015-02-06 Purchase new server for back office
  Debit Assets:Fixed:Computer Server $5000
  Debit Expense:Shipping $25
  Debit Expense:Tax:Sales Tax $400
  Credit Assets:Bank $5425

This is the transaction it means when it talks of "transferring the money
from your bank account to the appropriate Asset Cost accounts for each item".
With the use of A/P, this gets split into two -- transferring the money
from A/P to the asset cost account, then transferring the money from your
bank account to the A/P account. The overall result is the same, but there
is a bit of "float" between when you get the asset and when you pay for it.

On Fri Feb 06 2015 at 2:32:31 PM MP99 <martinrpayneuk+gnucash at gmail.com>
wrote:

> I'm posting this a little forlornly, since it looks to me like the mail
> server (and wiki) are down, so it's possible my subscription request has
> not
> been accepted. I'll try again another time if this doesn't work.
>
>
> I've recently started using gnucash to record the books for a small startup
> company. I think I have a grasp of the basics of what I should be doing,
> but
> then this question came up... I've tried googling for an answer, both under
> gnucash and for the general accounting principles, and I'm not finding an
> answer - probably because I don't know the correct terminology to search
> for.
>
> We purchased a computer, and I believe it should be recorded as a fixed
> asset, but I'm having trouble getting my head around how to do that.
>
> The steps I've done so far, are:-
>
> 1) purchase computer in store!
> 2) record the invoice as a bill in accounts payable
> 3) after I loaded the bank statement, I used "assign as payment..." to
> match
> the debit from our account as payment for the bill
>
> This is where I hit a roadblock in my understanding. The tutorial says at
> this point I should "record the purchase of your assets by transferring the
> money from your bank account to the appropriate Asset Cost accounts for
> each
> item". But I don't see how to do that - I've already got a transfer from
> the
> current account to Liabilities:Accounts Payable.
>
> Is this saying I should transfer the cash to Assets:Fixed Assets *instead*
> of to Liabilities:Accounts Payable, and if so, what do I do with the
> liability? I feel like I'm missing some concept that I should be applying
> to
> this situation, and I'd appreciate some guidance if anyone can see what I'm
> missing?
>
> Many thanks for your assistance.
> Martin Payne
>
>
>
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