Accounting Question?

Question

I am trying to add a couple of vechicles (totally paid for). To show the owners net capital. What account should I debit & credit. I currently have the vechicle as an asset and owners capital. Is this correct?????

Answer 1

You should remember original entry is debit cost of asset in Plant Property and Equipment under Vehicle and credit cash or Loan for Vehicle which is usually long termed debt (if you got vehicle financing).

If this is an asset transfer from the owners, your initial entry is correct.

Then, you have to expense the wear and tear through debiting Depreciation Expense Vehicleand credit Accumulated Depreciation under Plant Property and Equipment under vehicle.

Answer 2

If the vehicle was bought by the company/business, the entry must be debit Property, Plant and Equipment (vehicle) and credit Cash...

If it was contributed by the owners from their personal money, you entry is correct...

(if you know what type of organization is this - sole proprietorship, partnership or corporation, the entries might slightly differ)

honestly, added information would be needed so that there would be a clear understanding of the transaction...

Answer 3

I think that is correct. You would debit the asset and credit the equity account. (Vehicle and Owner's Equity)

Answer 4

If the owners contributed the vehicles, then yes it sounds like you're accounting for it correctly.

Don't forget you'll need to depreciate those vehicles.

Answer 5

For a good understanding on the fundamental accounting process read through this

http://futureaccountant.com/accounting-process/