288 Information Technology - Software
Assets
Fixed
Synopsis
Account 288 is established to record the acquisition price or license cost of Information Technology computer Software purchased by the dealership and used in the automobile business.
Debits |
Credits |
|
|
Example 1
Record the purchase of antivirus software for all of the personal computers at the dealership in the amount of $3,300.
Journal: Cash Disbursements and Purchase
Entry: |
|
Debit |
Credit |
Account 288 |
IT – Software |
$3,300 |
|
Account 300 |
Accounts Payable – Trade Creditors |
|
$3,300 |
Comments
IT Software is typically acquired under a license from the Software supplier. The acquisition cost is capitalized as a Fixed Asset while it used on a computer owned or operated by the dealership. This applies to Software used on personal computers as well as larger network systems connecting various departments within the entire dealership.
Note:
ONLY ASSETS USED IN THE OPERATION OF THE DEALERSHIP BUSINESS SHOULD BE INCLUDED IN THESE ACCOUNTS.
Cost of assets should include additional items such as: