Asset Accounting Journal Entries

1) ASSET ACQUISITION

The entry that gets generated on processing this transaction is as follows:

Dr Asset a/c

Cr Vendor a/c

The asset value dates are mentioned at the time of purchase. The asset value dates determine the date from which the depreciation would be calculated.

2) RETIREMENT/SALE OF AN ASSET

The entries that get generated are as below: (with notional figures)

  •  When asset is sold

Dr. Accumulated Depreciation A/c

Dr. Loss on Sale of Asset A/c (if applicable)

Dr. Clearing Account from Asset Sale

Cr. Asset (APC Value) A/c

Cr. Profit on Sale of Asset A/c (if applicable)

  • When the asset sold is cleared against the customer invoice

Dr. Customer A/c

Cr. Clearing Account from Asset Sale

  • At the time of payment,

Dr.        Bank Incoming A/c

Cr.        Customer A/c

3) WRITE-UP OF AN ASSET

The accounting entry that gets generated is:

Dr Accumulated depreciation a/c

Cr Depreciation

4) DEPRECIATION POSTING RUN

The entries that get generated are as below:

Dr Depreciation a/c

Cr Accumulated Depreciation a/c

Accounts Receivable Journal Entries

BOOKING OF SALES ENTRY

1) DELIVERY OF GOODS

On Delivery of Goods the following entry gets generated

Cost of Goods Sold a/c…………………………..Dr.       xxxx

To Inventory (Finished Goods) a/c…………Cr.              xxxx

2) BILLING

On doing the Billing, the following accounting entry gets generated.

Customer a/c…………………Dr.  xxxx

To Sales a/c                                  xxxx

To Sales Tax Payable a/c             xxxx

3) SALE OF TRADED GOODS

Accounting Entry for Sale of Traded goods

Customer a/c…….………….Dr. xxxx

To Sales a/c                                    xxxx

To Sales Tax Payable a/c               xxxx

4) RECEIPT FROM CUSTOMER (INCOMING PAYMENT)

The receipts from Customers are handled through Finance Accounting (Accounts Receivable).

The respective document type for receipt from customers is to be used.

Incoming Bank a/c………………………..Dr. xxxx

To Customer a/c                                     xxxx

5) SALES RETURNS (CREDIT NOTES)

The Sales Returns are processed from SD module.

Inventory Finished goods a/c…….Dr. xxxx

To Cost of goods sold Cr.                         xxxx

The accounting entry that gets generated in the system is as below:

Sales a/c…………………………………. Dr   xxxx

Sales Tax Liability a/c…………………….Dr. xxxx

To Customer a/c                                               xxxx