Depreciation

 

In the article on Understanding Balance Sheet vs Profit & Loss we talk a little about Depreciation. While I've often heard the argument that the truck payment is an expense and that if it's not shown as an expense you won't know what your real cost of operation is, the Principal portion (the portion that applies to and reduces the amount of your loan) is not an Expense. Instead of expense Depreciation is allowed as a deduction for any assets that you have. Please refer to the article for more details on this.

 

Here we'll cover how to use a Split transaction to enter depreciation for your truck and/or other assets.