This is the first in a series of articles on accounting and The Truckers Helper . We are going to answer our most common accounting questions in these articles. Our first issus is purchasing a truck and how to enter the purchase, loan and ongoing payments in the accounting section.

PURCHASING A TRUCK

ACCOUNTING PRINCIPLES:
When you purchase a truck you create an ASSET, the truck itself, and a LIABILITY, the loan for the truck. The only things associated with the purchase which are EXPENSES are any taxes, licenses, etc. The down payment on the truck is NOT AN EXPENSE, it is applied againt the liability.

• 1. Go to Truck Maintenance, click ADD TRUCK and complete the Q&A to add the truck.
• 2. Click TRUCK INFO, to access the Truck Information screen. Fill out the truck information including the PURCHASE PRICE and loan information. Click SAVE & EXIT. NOTE: If this is a truck you already had and are now adding to the program enter the BOOK VALUE of the truck as the Purchase Price.
• 3. The program will ask if you want to create a Liability Account. Answer YES to create the Liability and Asset accounts for this truck automatically. NOTE: if you got a loan from the bank for more than the value of the truck do not use this process to creat the Liability, see #2 below.  

ADJUSTMENTS:

Once you have the Asset and Liability accounts created you will need to enter the other items that affect this transaction. How this is done will depend on how your DOWN PAYMENT was handled.

1. CASH DOWN PAYMENT: Show this as a PAYMENT on the Liability from the account you took the cash from. This is done as a single entry in the Income & Expense section.

• TYPE = LIABILITY
• AMOUNT = Amount you Paid Down (do not include taxes, etc.)
• PAID BY = The type of account you paid this from (CHECK, CASH, etc)
• PAYMENT ACCOUNT = The account you paid this from.
• CHARGE TO ACCOUNT = The name of the Liability Account.

2. LOAN FROM A BANK: if you got a loan from the bank for the cost of the truck, taxes, fees, etc. then setup the liability using a single entry as shown below. You will then make individual entries to pay for the Asset, taxes, fees, etc. to cover the purchase.

• TYPE = LIABILITY
• AMOUNT = Amount you received from the bank.
• PAID BY = N/A
• PAYMENT ACCOUNT = The account you deposited the loan into.
• CHARGE TO ACCOUNT = The name of the Liability Account.

2. TRADE IN: if you trade in your old truck you will need to TRANSFER the value from your old trucks ASSET account and apply it against the LIABILITY ACCOUNT for the new truck. In The Truckers Helper you cannot directly transfer money from an ASSET to a LIABILITY, so this is done as 2 seperate tranactions.

• 1. Click QUICK ENTRY/ASSET/SALE - the Sale of Asset box will appear.
• 2. Select the Asset Account for the FROM account.
• 3. Select the CASH account for the TO account
• 4. Enter the date, amount of your trade in value, etc.

NOTE: this simplified transaction is based on receiving the same amout as a trade in as you have the asset on your books for. If you received MORE for your trade in than you had the in your asset account you will need to transfer the difference FROM CAPITAL GAINS TO the ASSET ACCOUNT. If you received LESS than your asset you will need to transfer the difference FROM THE ASSET ACCOUNT TO THE CAPITAL GAINS ACCOUNT.

The program will create entries for the Sale of the asset and depost the amount you received as TRADE IN in your CASH account. Next you need to show this as a PAYMENT from your CASH account against the LIABILITY. This is done as a single entry on the Income & Expense page.

• TYPE = LIABILITY
• AMOUNT = Amount of your trade in value.
• PAID BY = CASH
• PAYMENT ACCOUNT = CASH
• CHARGE TO ACCOUNT = the LIABILITY account

EXPENSES:

The expenses associated with this transaction are any taxes and licenses which you paid at the time of the purchase. These are entered as EXPENSES in the normal manner and charged to the appropriate Expense Account.

REPORTS

Profit & Loss Report - payments made on the principal of a liability are not an EXPENSE and are not shown on the Profit & Loss report. You expense for the truck is taken as a deduction for DEPRECIATION against the ASSET. The INTEREST you pay is an EXPENSE and will be shown on your Profit &Loss Report.

BALANCE SHEET - the Balance Sheet will reflect payments which have been made on LIABILITIES and will reduce the amount of the LIABILITY by the amount of the payments made on the PRINCIPAL BALANCE. The ASSET will also be reduced whenever a DEPRECIATION deduction is taken.

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