Opening Balance for Short Term Assets

RaysgtoRaysgto Member Posts: 1

Hi,

I want to give opening balance to short term asset account. How to do that?

Regards,
Raysgto

Comments

  • AlexiaAlexia Administrator Posts: 3,314 admin

    Hi, @Raysgto!

    Usually, you would just make an expense transaction on the Transactions page from Owner's Investments/Drawings to that asset account. If you can give me more details about that asset and exactly what you're trying to represent, I'll be able to tell you for sure how to enter it!

  • DavidhleomDavidhleom Member Posts: 4
    Hi @alexia , I have a saving account as a certificate of deposit and I think I must account as a short term asset instead of current asset. Am I correct? How can I do that.
  • SamdSamd Administrator Posts: 557 admin

    Hey @Davidhleom, sounds correct to me! I think whether you go short term or current will also depend on how long the fixed term is: our short-term assets are intended for a year or less, and long-term for longer timeframes. But if you won't be transferring money in and out then one of these 'Other' asset types would be a little easier to track, rather than a current/cash & bank account.

  • DavidhleomDavidhleom Member Posts: 4
    Hi @Samd , thanks.
    Could you please explain me how to register the certificate of deposit as a short term asset in Wave? David
  • SamdSamd Administrator Posts: 557 admin

    Definitely @Davidhleom!
    So first you'd want to head over to Accounting > Chart of Accounts and generate a Short term Asset account and then head to Accounting > Transactions.

    The next steps will depend on the exact situation, but if you're recording a Certificate of Deposit out of business expenses, you'd record an expense transaction for the value of the certificate, from the relevant bank account. You'll also want to date this the same as when this transaction would have originally occurred.

    Now, you'd want to generate a Journal Transaction in which you debit your short term asset account, and credit the expense/bank account for the value of the Certificate of Deposit.

    If you're making a personal investment into your business this way however, all you'd need to do is record an income transaction for the value of the certificate. The account will be your Short term asset, and the category would be Owner Investment/Drawings. Running it through an equity account like this then won't impact your profit and loss, until which point the fixed term ends, and you can declare the interest earned as profit.

    I hope this helps!

Sign In or Register to comment.