Depreciation

[GreenBean]

I am still learning bookkeeping for small businesses. Is adjusting for depreciation of assets something you are doing for your all your clients and if so, are you doing so just for purchases that come up or for assets purchased before the client has signed with you? What if the asset was purchased before the client hired you and no previous depreciation was made in the books for the previous year/s?

[pjerb]

Depreciation adjustments should be done monthly. Debit depreciation expense and credit accum. depreciation. If no entries were made in previous years, the tax returns should have the amounts for each year. If the clients books are up to date, meaning everything else was done corrently in previous years, I would credit accm. depreciation and debit the retained earnings account (which is where the expense accounts closes to at the end of the year, normally you don't make entries into this account but this would be the exception). You should then have the accum. depreciation account correct for prior year and begin to make a monthly entry for the current year. I hope this answers your question, if not, post any new questions and I'll try to help you out.