We’ve been talking about accounting lately here. It’s not to teach you how to be an accountant, but to understand your own financial statements well.
It’s important to know the difference between an “Operating Note Payable” and a “Capital Note Payable.” A Capital Note Payable is a loan for an item you bought that has to be depreciated, such as a truck or computer system. (We discussed depreciation a few days ago.)
An “Operating Note Payable” example is a lease on a vehicle or piece of equipment. Since you don’t own the vehicle, you can’t depreciate it. Instead, you just expense the lease payments as they come due on your Income Statement.
It’s the same for a copier or a tractor. Just expense the lease payments monthly on your Income Statement, and they don’t show up on your Balance Sheet.
More tomorrow!
I wanted to thank you for taking the time to break this out. It’s important and I appreciate the breakdown you have been laying out for us.
Don
Operating Note Payable and Capital Note Payable are terms I was not familiar with.
This blog is so much better than a training course, only because it is FREE.
All we have to do is read the daily emails and we learn a bunch of helpful information.
Thank you
How do I get this Larry psycho to leave me alone? I have unsubscribed MULTIPLE TIMES… He keeps sending me his garbage without my knowledge or consent? Anybody else sick of this crap?
Respect man respect, maybe someone keeps signing you up to learn some manners