Sale of Assets

This is where you account for assets you sell or dump. If you sell a vehicle, you have its value on that up to date list of assets you keep. You also have a record of how much it has been depreciated. You enter the cash you make off that sale in cash. Then you balance that entry with a credit to the asset account and a debit to the accumulated depreciation account, and whatever it takes to make those number balance is your gain, or loss, on that sale.

Say you sold a truck which you bought for $6,780. It has depreciated by $3,200. You managed to get someone to pay you $5,400. The entry to record this sale would be as follows:

If your balancing entry had been a debit, it would have meant you lost money on the sale. Here's how to think about it: You paid $6,780. On your books, its value had decreased by $3,200, meaning you had expensed out that amount of money over the period of time you had the truck. So, to you it's actually worth $3,580, and you sold it for $5,400, which was a gain of $1,820.

NEXT PAGE

Jump ahead, or backwards with these links:
Expenses Paid by Cheque : Expenses Paid By Cash : Accounts Payable : Cash Discounts on Purchases : Petty Cash : Payroll : Sales & Customer Deposits : Accounts Receivable : Inventory : Deposits : Sale of Assets : Depreciation : Suspense : Month End Adjustments : Paper Trails

Copyrighted 1999-2008 All Rights Reserved
  Privacy Policy    Terms of Use   Most Recent Traffic Information

This page last modified: 14 Mar 2008