 Zero Accounting Software 2023 Organized Fixed Asset Account Categories Get ready to become an Accounting Hero with Zero 2023 Here we are in our Custom Zero homepage going into the company file we set up in a prior presentation. Get great guitars. We're going to duplicate some tabs to put reports in like we do every time. Right-click on the tab to do so. Duplicate that is. Right-click in the tab up top to once again duplicate. Back to the tab to the middle. Accounting drop-down to open the balance sheet. But we are now opening up the custom balance sheet we made. If you don't have a custom balance sheet, you can just open the normal balance sheet. But the customization we put in place is that grouping we had down here for the liability accounts. Tapping to the right, we're going to open the income statement. Accounting drop-down. The custom income statement which is a comparative income statement comparing the current month we are working on February to the prior month we already did. January. Let's go back to the tab to the left and scroll on up. The date looks good to go. So now we're going to go to thinking about our accounts for our depreciation. So I'm going to go to the first tab here and let's go into our chart of accounts by going to the Accounting drop-down and then scrolling down to our chart of accounts. Within the chart of accounts, Zero has this nice system of breaking out each category. So I can kind of see less accounts. I'm going to go into the Asset category because we're going to be focusing in on our fixed asset type of accounts which are categorized over here. Now note, when you first set up your accounting system within Zero, I think Zero is better than some other accounting softwares at not overloading you with too many accounts in a generic chart of accounts. So when we first set up the system, unlike say QuickBooks Online which gives you a whole bunch of say fixed asset type of accounts which are designed to kind of accommodate every single kind of situation, Zero has less in terms of the chart of accounts when you first make up an accounting system which I think is good because that allows you to kind of do more of your own customization and not have to delete accounts. Now we want to focus on kind of formatting these fixed asset accounts. Now let's go to the balance sheet here to kind of think through this. If I go to my fixed assets down below, we only have one category of fixed assets at this point called Furniture and Equipment and then we've got the depreciation which is related to that fixed asset. So a quick recap on the fixed assets. When we buy the fixed assets as we saw in the prior presentation, we do not put them on the books as an expense even if we're on a cash-based system but instead have to do an accrual thing if you're in the United States, you have to do so for taxes if nothing else, putting it on the books as an asset and then expensing it with depreciation which we will do periodically. Now in the United States, oftentimes the tax code is going to force us to do this for our income tax reporting and therefore it's useful for us to track the depreciation schedules in another software, the tax software which has to do at least the tax depreciation calculations and can then also do the book depreciations if we want to depreciate separately for the book side of things. That means that what we want to have on our categories typically is a categorization that matches whatever our sub-ledger is going to look like. So if we're using external software for the sub-ledger, we would like to ask and if it's our CPA firm or our tax firm what are the sub-ledger accounts that are in the software so that we can have the same grouping in our system. So in this case we have furniture and fixture, machinery and equipment and then automobiles and vehicles and whatnot but these are the two categories that line up to what we are doing at this point in time. So what we have on our system is furniture and equipment kind of grouped together. Now we could do that, we can group them all into one kind of big category and even though the tax software is going to kind of break it out into two categories but I think oftentimes the easiest thing to do is to use the broad category ranges that are going to be the same as what is on the sub-ledger. So what I'd like to do here then is I'm going to break out our furniture and equipment to these two categories, furniture and fixture and then machinery and then I'll break out the items that are in each category to match out the 98,000, the 5,000 and then we have the accumulated depreciation that we're going to be calculating as well so each of these categories we could have a separate accumulated depreciation account per category which is something that I think would be standard or we can have a one accumulated depreciation account for all of the fixed-asset categories. So what I'm going to do is I'm going to break out two fixed-asset accounts, allocate this out between the two accounts with a journal entry and then make accumulated depreciation accounts. Now if you've used like QuickBooks Online they use sub-accounts to do this we're not going to do sub-accounts but rather do something similar to what we did here with the loan breakout have that parent account to give us that more detail over here on the fixed-assets. Alright so let's go back on over to the first tab to see how this will be structured and I'm going to first adjust the name for this one so I'm going to go into this thing here it's going to be a fixed-asset 15-20 but I'm just going to call this one furniture and fixtures so let's say furniture instead of end equipment we'll say fixtures furniture and fixtures okay so I'll save that one and then I'm going to make another one called equipment so the equipment so this is furniture and fixtures and that's going to be 15-20 so maybe 15-25 let's say will be will be the equipment 15-25 so I'm going to say alright add a new one add an account up top and we're going to say oh what happened here that's not what I want to do I'm going to go back and I want to say add not a bank account add an account 15-25 and it's going to be the account kind is going to be a asset account it's going to be an asset account a fixed-asset type of account okay boom save it it needs to be I need a name equipment focus focus equipment alright so then if I scroll down now we've got the furniture and fixtures we've got the accumulated depreciation now that accumulated depreciation I'm going to try to make it a sub-account of the furniture and fixtures account so I'm going to I'm not going to notice I'm not doing a sub-account in terms of what you might see in QuickBooks online but when I do my groupings I'll make it a sub-account right here I want to indicate that it's not accumulated depreciation for everything but accumulated depreciation related to the furniture and fixtures I'll go into that and I could say accumulated depreciation and I'll say furniture furniture and fixture can't spell it sometimes I would abbreviate it ACCD pre sometimes but it lets me type out the whole thing here and it fits so I'll keep that for now and so then this is 1521 so there we have that and then I need another accumulated depreciation depreciation for the equipment which I'll make account 1520 1526 so I'm going to say add an account 1526 it's going to be a fixed asset and we're going to call it accumulated depreciation equipment and save it so now the numbers line up so we've got furniture and equipment the accumulated depreciation equipment the accumulated depreciation and then vehicles if we have vehicles and it's related accumulated depreciation