Purchasing a motor vehicle without a loan (cash purchase)

Buying anything is one of the core part of the Microsoft Money program. For most items, it is just a simple matter of entering a transaction.

However, when you start buying assets such as a motor vehicle, you will notice that your net worth report takes a sharp dip (depending on the value of the spend) when purchasing it. Your real net worth hasn't changed that much - you've just moved some of your wealth into an asset.

If you don't mind seeing this sharp drop, then you need not do anything. However, if you want to track the vehicle, then you should create a new asset account for the car/automobile with a zero starting balance.

Instead of using a withdrawal transaction when you buy the vehicle, instead use a transfer transaction, transferring the money into the vehicle asset account.

When viewing the net worth now (assuming you include the asset account), the line is pretty stable, which more accurately reflects your wealth.

Vehicles typically lose value over time, so if you want to depreciate the vehicle's value over a period of time, then see Article 474.

Category: Accounts

Keywords: Net Worth, Asset, Depreciation, Transfer, Car, Automobile