In double entry accounting, how do you account for an old asset that was previou

  1. profile image61
    Vegabondposted 7 years ago

    In double entry accounting, how do you account for an old asset that was previously off the books?

    Every month, I do an income statement, a balance sheet, and a cash flow statement. One day, I discover a large sum of money in a shoe box, which I had placed there a long time ago and simply forgotten about.

    Normally, equity is affected only by income and expenses. But this isn't income, because it was already my money. What is the customary way of handling this?

  2. MBA2010 profile image56
    MBA2010posted 7 years ago

    Sounds like you want to add it to the value of the business without counting it as income.  This would be really hard especially since it does not sound like it is already in your equity account.  If you did already have it and simply forgot it wouldn't it already be in your equity account?  I would recommend that you count it as income and an extraordinary item the problem with this is that you still have to report it as income.

  3. Pink Puddle profile image58
    Pink Puddleposted 6 years ago

    Would you not just treat it as an introduction of Capital to the Balance Sheet?  How you explain to the tax man what it was doing hanging around in a shoe box in the first place, ..... well ;-)

 
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