Gail
Blogger
Share this content
0
993

Use of Home and Expense Classification Explanation

Use of Home and Expense Classification Explanation

Hi To My Fellow Community Members,

Please crack this one for me.

a)    Use of Home

Can someone please advise how to distribute expenses and which expenses to distribute when client uses a room or a couple rooms in their house to run their business?

b)   Purchases?

If an interior designer purchases computer software for use in their business how would you classify this expenditure? It is a direct cost of the business so would you classify it as purchases? Please explain thoroughly what you would do and why.

     Thank you.

     Gail

Replies

Please login or register to join the discussion.

01st Mar 2016 21:32

I'd say

a. Usually floor area or number of rooms, unless you have a better idea.

b. I'd say software because that's what it is.  It's not purchases because they don't sell software. They use software to help them produce a different service which they then sell on.

Others may have other views.

Thanks (1)
01st Mar 2016 21:43

Is the interior designer using the software to arrange the home office?

Thanks (0)
avatar
01st Mar 2016 22:00

sounds like an exam question
With regard to the software you have to establish whether it is an outright purchase or an annual licence. Please explain clearly why you have asked your question in the manner you have

Thanks (0)
avatar
By Gail
02nd Mar 2016 02:01

Real life scenario

I asked the question in the manner I did because i'm seeing these issues in the practice in which I am training.

Thanks (1)
03rd Mar 2016 17:36

Trained by who

Gail wrote:
I asked the question in the manner I did because i'm seeing these issues in the practice in which I am training.
Is there any reason why you are asking on here rather than asking the people training you?

Because if the practice where you are training isn't giving you guidance on these everyday sorts of transactions then they are not training you properly. You need to either raise the question of getting proper support, or consider if looking for another training position is right for you.

Thanks (0)
avatar
02nd Mar 2016 00:54

Home work

 For the Home

As mentioned floor area or number of rooms or you could use simplified expenses.

 

Software

As suggested software it is certainly not a purchase so it would go to software costs or software subscriptions if you pay on a monthly basis. 

 

Thanks (0)
avatar
02nd Mar 2016 08:36

are you sure

that you are training? You have been a member of Aweb for over 5 years.

Thanks (0)
avatar
By Gail
02nd Mar 2016 13:31

No I am not sure and you have been a member for more than 6 years. Are you sure you have accounting knowledge? Anyway I won't waste any more time on you.

Thanks (1)
avatar
03rd Mar 2016 17:30

Gail
This sort of comment is beyond the pale

Thanks (0)
avatar
03rd Mar 2016 19:32

@gail
I may have only been a member here for over 6 years but if you look at my other posts at various times you will see that I have been in our very wonderful profession for much much longer.

And stepurhan is spot on and so is carnmores

Thanks (0)
avatar
03rd Mar 2016 22:02

The above

I must say these were pretty basic questions. It is the sort of thing one of my clients may ask 

Thanks (0)
04th Mar 2016 08:31

Worth Reading

Where a home is used partly for business purposes, the simplified expenses rules allow a flat rate deduction for household running costs listed at BIM47820

Thanks (1)
avatar
By Gail
09th Mar 2016 07:12

Well done Arsalan!

You are a credit to the community! Helpful and understanding. Brilliant answer, the type of answer which supplements learning on the job.

The Innkeeper can learn a lot from you, and i'm not just talking accounts.

Thank you.

Thanks (0)
09th Mar 2016 09:01

Fourth Post in

Gail wrote:

You are a credit to the community! Helpful and understanding. Brilliant answer, the type of answer which supplements learning on the job.

The Innkeeper can learn a lot from you, and i'm not just talking accounts.

Thank you.

In a Daze mentioned simplified expenses over a week ago but you were too busy to read it, apparently.

Thanks (0)
Share this content