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F. Naz
F. Naz, Chartered Accountant
Category: Business
Satisfied Customers: 5563
Experience:  Doing Chartered Accountancy
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Book-keeping in QuckBooks - how do i account a PC Game

Customer Question

Book-keeping in QuckBooks - how do i account a PC Game purchase ? Please consider that our business is directly related to gaming industry. Thanks !
Submitted: 8 days ago.
Category: Business
Expert:  F. Naz replied 8 days ago.

Kindly elaborate about your business and provide details regarding purchase too, thanks.

Customer: replied 8 days ago.
Hi, we are PC Controller Manufacturers, the purchase was placed on STEAM platform.
Our company website: http://delanengineering.com
Expert:  F. Naz replied 8 days ago.
Do you sell pc games to clients? Is this your main part of business? And what was the purpose of buying that game?
Customer: replied 8 days ago.
I do not sell games, i sell PC controllers for PC games, purpose was to test our controllers with that game.
Expert:  F. Naz replied 8 days ago.
Okay, i will tell you the accounting journal entry for this purchase according to accounting principles but for quick books you yourself need to see how to put that entry in quick books, will that be fine?
Customer: replied 8 days ago.
that will be fine, as long as i will know what sort of categories i need to use, it will be a lot help for me.
Expert:  F. Naz replied 8 days ago.
What is the amount of purchase and for how long that game will be in your ownership
Customer: replied 8 days ago.
it is around 15 GBP, it is electronic version of the game, so i will never dispose it.
Expert:  F. Naz replied 8 days ago.
Do you have a policy for fixed asset or any kind kind of capitalisation limit for fixed assets?
Customer: replied 8 days ago.
No, its a simple sole trader company, no LTD, with small turnover. We do not have rules regarding capitalisation. For us a purchase of game is a simple EXPENSE
Expert:  F. Naz replied 8 days ago.
Okay. Kindly read the below info it will help you in understanding . According to this info
In my opinion you need to Debit Pc game expense and Credit Cash / BankAccounts title are upto you, you can change the name according to your choice, for cash bank, it is upto you which one you choose. I used both, because i don't know your paymemt ways and which account you normally used for payments.InformationFixed Assets
The accounting profession defines fixed assets as tangible and long-term purchases. Tangible means physical in nature. Long-term in accounting denotes lasting more than one year. In addition, fixed assets have the ability to be repaired or maintained to extend their life expectancy. So some assets may appear fixed because they are tangible and could last for more than a year but they are consumed or used up over time. Thus they are considered consumables and not fixed assets. Examples include:Toner Cartridges
Chemicals
Office Supplies
Small Tools Including Medical/Dental Hand Tools
These types of purchases are classified as expenses and not fixed assets.There is also another common sense issue associated with defining fixed assets and this is cost. Think of the trash can at your desk. It qualifies as a fixed asset. First it is tangible, you can touch it and it has physical form. Secondly, it will last more than a year, many years actually. Finally, it will not be consumed or easily used up. However it costs $15.The problem with small dollar items like the trash can is that the cost of administering the paperwork associated with tracking fixed assets (depreciation schedules, production analysis, capital investment issues etc.) costs more than the value of the asset. So accountants use a threshold of value to separate these lower cost fixed assets from recorded fixed assets. I encourage small businesses to use $500 as the minimum total price. If less than $500, just expense the item to the most appropriate account. The top three most common expense accounts are supplies, office operations or transportation.Reference :- https://businessecon.org/2017/03/05/bookkeeping-fixed-asset-purchases-lesson-49/
https://www.accountingtools.com/articles/2017/5/10/fixed-asset
Expert:  F. Naz replied 8 days ago.
Note :-
If you find my information helpful then kindly rate it or accept it so i can get credits for my efforts, thanks.
Expert:  F. Naz replied 8 days ago.
I think you use cash as account title, because on financial statement of Amazon i see cash on balance but not bank.
Expert:  F. Naz replied 8 days ago.
Referencehttps://www.quora.com/What-is-the-journal-entry-of-purchased-computer-games-and-paid-by-cheque
Customer: replied 8 days ago.
Thanks for all the info. I think i will put it as an expense in a category as on the attached screenshot.
Will this be ok ?
Expert:  F. Naz replied 8 days ago.

Can you tell me other.options available for detailed type so we can choose best possible one

Customer: replied 8 days ago.
it is too many to list, and i have no time to do so. Sorry
Expert:  F. Naz replied 8 days ago.

Then without knowing all options i am unable to tell whether you selected best possible or not, for detailed type part, thanks.

Note :-
If you find my information helpful then kindly rate it or accept it so i can get credits for my efforts, thanks.

Expert:  F. Naz replied 5 days ago.
Hello
Just a reminder, was my information helpful to you?

Note :-
If you find my information helpful then kindly rate it or accept it so i can get credits for my efforts, thanks.