How do I classify cost of initial business startup in the GAAP Chart Of Accounts...Such as the down payment for the initial sale of the business.
by 
ladybug42
ANSWERS: 1
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This depends upon the type of entity. The simplest case is that of a sole proprietor: the assets purchased are the debit and the credit is to owner's equity. If no assets have yet been acquired, then the asset will be a prepaid. If the assets do not equal the investment, you may need to use Goodwill to balance. If, by making the down payment, you have obligated yourself to future payments, you need to present these as a liability against the assets you will definitely receive by your agreement.
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