Asset Liability and operating expense

JakeCote

This question I've tried to research and have not found an. answer yet.

I run a lawn care company and have a liability for a new mower that was purchased when I was approved for a loan. I have created a Liability for that mower as I make monthly payments on it.

Question 1:
--If I make a payment by credit card do I make that transaction a withdrawal from that liability account for that monthly payment?

Question 2:
--Will that "expense" be considered an operating expense when I create a Report?

--Question 3:
--What Is the best way to documents liability monthly payments in this program?

Thanks for any help

remotebooks

Question 1:

If you're paying a loan with a credit card, you can create a withdrawal (expense) transaction where "Account" is your credit card and "Category" is your loan. When you're choosing your category, you need to select "Transfer to Bank, Credit Card or Loan" to get to your loan account. This withdrawal (expense) entry will create a corresponding deposit (income) entry to reflect the transfer of funds from one account to the other.

Question 2:

It depends on where you create your expense account in your Chart of Accounts. When you're generating your Profit & Loss, Cost of Goods Sold accounts appear under the Cost of Goods Sold section while Operating Expense, Payment Processing Fee and Payroll Expense accounts are listed under the Operating Expenses section.

Question 3:

You can record your monthly payments against a liability through transactions or journals.

Happy number crunching!

Sam - RemoteBooks
hello@remotebooks.co