I am cleaning up my client's book. Total Accumulated Depreciation amount is much higher than total Fixed Assets. Incorrect entries posted for the past several years, vehicle, equipment, furniture posted together under one account. They say that all of the assets have been fully depreciated.
Is this just an error in their books or did they file their taxes incorrectly as well? If it's just an error in their books, the adjusting entries should match their tax return (debit accumulated depreciation, credit depreciation expense). If they filed their taxes incorrectly, they need to contact their CPA/tax accountant.
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