Equipment in Balance Sheet

dgwddgwd Member Posts: 1

Trying out Wave and brushing up on accrual basis accounting... I had a balance sheet where Cash and Bank + To Be Received - To Be Paid Out = 0. When I added an expense for purchasing a piece of equipment, the bank account reduced properly and the equipment shows as a long-term asset. However, the top line of the balance sheet is now negative by that amount. If the credit to cash and bank equals the debit to an asset account, equipment, why does the balance sheet change? What am I missing?

Comments

  • SamdSamd Administrator Posts: 560 admin

    @dgwd this may have to do with the date range of your P&L report not matching the date the credit was applied, but it sounds like you are doing everything correctly. That being said, as P&L only shows Cash and Bank + To be Received - To Be Paid Out, it is only registering the expense in which you paid for your company equipment, against your overall profit. So, until your net profit zeroes out and then surpasses the expense, P&L will continue to show a negative amount in terms of a base level revenue versus expenses report. Our General Ledger Report should break it down a little better however. I hope this helps!

Sign In or Register to comment.