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Capitalizing Internal Labor for Fixed Assets
Moving internal staff wages from expenses to a Fixed Asset account because they built a company-used machine or facility.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Equipment / Building (CIP) | Asset (+) | 8,000.00 | - |
| Salaries & Wages Expense | Expense (-) | - | 8,000.00 |
💡 Accountant's Note
If your own engineers build a machine for the factory, their salary for that time is not an 'operating expense'—it is part of the cost of the asset and must be capitalized.
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