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Jun 08, 2018
Company Starting Up
by: Stephanie

Thank you for your company start up bookkeeping questions.

1) Yes

2) Yes - keepin it simple! :)

3) You can simply credit cash and debit Start-Up Costs as an Expense account, and your CPA can expense it.

Or, you can credit cash and debit Start-up Costs as an Asset account, and your CPA can take a section 179 deduction.

You can only take up to $5,000 as an expense for startup costs, anything over that would need to be amortized as an asset.

Typically assets under $500 are expensed, no need to depreciate.

I hope that helps. Let me/us know if you have any more questions.

Apr 09, 2015
Good Company Start Up Reading
by: Michael C. Quinn

This is great! I was looking for exactly the same thing about Company Start Ups all day yesterday.

Jun 05, 2009
Thank You For Your Help With My Bookkeeping Questions
by: Maria

Hello, Thank you for help with my questions. I know you are probably way busy but if you can help me answers these questions I would be so grateful. I am directing friends to your website. Thank you again..

This is for a Sole Proprietorship.

1. I understand that it is my choice to use the expense method or asset method for my start up costs. But can I used both at the same time( meaning expense the start up expense such as business cards adverting etc.. and capitalize the assets such as computers and furniture.)

2. Can I pay myself back and Expense or capitalize together for start up costs? What I mean by that is if I buy a computer for 2,000.00 before the business starts do I

a. Debit the asset- computes and credit loan payable-to myself( liability account) or

b. Debit the asset account and credit owners equity?

Either way there is going to be a positive 2,000.00 in the asset account, so my question is can I debit either loan payable or owners equity for the 2,000.00 and credit the cash when my business has the money to pay me back?

3. And when I do that am I still allowed to depreciate the asset or is that double dipping?

Is the process the same for an expense, can I get paid back and deduct the expense on my schedule C?

4. If I decided to make my start up costs an asset account should I make an asset account called startup costs or should I make individual asset accounts for example computers, furniture etc..

Since you can use 5,000 of start up costs if you take that election does that mean your asset accounts for the 2,000.00 computer will go to 0 at the end of the year? Since you took the full deprecation?

What would you personally do if you had only 3,000.00 in start up costs, two computers the rest office supplies adverting etc.. would you expense them all or capitalizing them?

If you expense them would you put them in individual expense accounts like advertising, office supplies, or one expense account called start up expense?

Last question?.. would the 5,000.00 in startup costs be treated separate from the regular business expense incurred after the business open. ( for tax purposes)

Thank you.


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