Asset disposal account is the account which is opened when any fixed asset or its part is sold to other party. Instead all record in same asset account, it is good, we transfer asset or part of asset's current cost to asset disposal account for finding correct and transparent view of all recorded transactions of sale of asset and profit or loss on same deal.
Following entries will pass for opening asset disposal account and then some entries for transactions relating to asset disposal accounts.
When we does not open provision for depreciation account
1. When book value of asset which has been sold to Asset Disposal Account
Asset Disposal Account Dr.
Asset Account Cr.
2. For Recording the Sale of Same Asset
Bank Account Dr.
Asset Disposal Account Cr.
3. When there is profit on sale of asset
Asset Disposal Account Dr.
Profit and Loss Account Cr.
5. If there is loss on sale of asset
Profit and Loss Account Dr.
Asset Disposal Account Cr.
When we open provision for depreciation account
1. For transfer the original cost of asset to asset disposal account
Asset Disposal Account Dr.
Asset Account Cr.
2. For transfer of accumulated depreciation of asset sold to asset disposal account
Provision for depreciation account Dr.
Asset Disposal Account Cr.
3. For Recording the Sales of Asset
Bank account Dr.
Asset Disposal Account Cr.
4. For Profit on asset disposed off
Asset Disposal Account Dr.
Profit and Loss Account
5. If there is loss on sale of asset
Profit and Loss Account Dr.
Asset Disposal Account Cr.
Sample of Asset Disposal Account
From above screenshot of asset disposal account, we can find more information. All assets or part of assets which we will sell will transfer to its debit side and asset's credit side because with this, we are decreasing the value of asset. Now, we will calculate profit or loss on each asset's sale by deducting sale value plus provision from original cost of asset.
See Also
Categories: Accounting terminology | Account | Basic Accounting
Following entries will pass for opening asset disposal account and then some entries for transactions relating to asset disposal accounts.
When we does not open provision for depreciation account
1. When book value of asset which has been sold to Asset Disposal Account
Asset Disposal Account Dr.
Asset Account Cr.
2. For Recording the Sale of Same Asset
Bank Account Dr.
Asset Disposal Account Cr.
3. When there is profit on sale of asset
Asset Disposal Account Dr.
Profit and Loss Account Cr.
5. If there is loss on sale of asset
Profit and Loss Account Dr.
Asset Disposal Account Cr.
When we open provision for depreciation account
1. For transfer the original cost of asset to asset disposal account
Asset Disposal Account Dr.
Asset Account Cr.
2. For transfer of accumulated depreciation of asset sold to asset disposal account
Provision for depreciation account Dr.
Asset Disposal Account Cr.
3. For Recording the Sales of Asset
Bank account Dr.
Asset Disposal Account Cr.
4. For Profit on asset disposed off
Asset Disposal Account Dr.
Profit and Loss Account
5. If there is loss on sale of asset
Profit and Loss Account Dr.
Asset Disposal Account Cr.
Sample of Asset Disposal Account
From above screenshot of asset disposal account, we can find more information. All assets or part of assets which we will sell will transfer to its debit side and asset's credit side because with this, we are decreasing the value of asset. Now, we will calculate profit or loss on each asset's sale by deducting sale value plus provision from original cost of asset.
See Also
Categories: Accounting terminology | Account | Basic Accounting
The cost centre manager should be notified of new assets that have been assigned to them. Selecting the new asset view should allow the cost centre manager to allocate it to a location and a person responsible.. itad services
ReplyDelete