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Asset Entries

The document discusses various fixed asset accounting entries for: 1) Recording the purchase of an asset and transferring it to an asset account 2) Adding costs to fixed assets under construction (CIP) and later capitalizing CIP to a fixed asset account 3) Recording depreciation expense and accumulating depreciation in an account 4) Retiring or removing a fixed asset and any associated costs or proceeds from disposal The entries debit and credit the appropriate fixed asset, accumulated depreciation, expense, and disposal accounts to properly record the transactions at each stage of an asset's life in the accounting system.

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suresh
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36 views

Asset Entries

The document discusses various fixed asset accounting entries for: 1) Recording the purchase of an asset and transferring it to an asset account 2) Adding costs to fixed assets under construction (CIP) and later capitalizing CIP to a fixed asset account 3) Recording depreciation expense and accumulating depreciation in an account 4) Retiring or removing a fixed asset and any associated costs or proceeds from disposal The entries debit and credit the appropriate fixed asset, accumulated depreciation, expense, and disposal accounts to properly record the transactions at each stage of an asset's life in the accounting system.

Uploaded by

suresh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Assets Entries

Asset Purchased entry


Asset Clearing a/c Dr
To AP accrual a/c Cr

Asset Adding Entry


Asset Cost a/c Dr
To Asset Clearing a/c Cr

Asset Changes Entry


Asset Cost a/c Dr
To asset clearing a/c

Asset transferred Entry


Asset Cost a/c Dr
Accumulated Depreciation a/c Dr
Asset a/c Dr
To Accumulated Depreciation a/c Cr

Asset Revalue Entry


Asset Cost a/c Dr
To accumulated Depreciation a/c Cr
To revaluation Reserve a/c Cr

Asset Retirement Entry


Accumulated Depreciation a/c Dr
Proceeds of Sale a/c Dr
To asset gain a/c Cr
To gain A/c Cr

Asset Removed Entry


Accumulated Depreciation a/c Dr
Proceeds of Sale a/c Dr
To asset gain a/c Cr
To gain a/c Cr
To Cost of Removal a/c Cr
2ND PERSON

1)When u enter assets in FA

Asset cost a/c Dr


to asset clearing a/c.

2) when we calculate depreciation

Depreciation expense a/c Dr


to Accumulated depreciation

3) for CIP assets we don't know depreciation

CIP cost
to CIP clearing a/c

4)when you capitalize cip assets

asset cost a/c Dr


to cip cost

For depreciation

Depreciation expense a/c Dr


to accumulated depreciation

5)Change capitalized to CIP

CIP cost a/c Dr


to asset clearing a/c
3 PERSON

When we record Asset Invoice in Payable

Asset Clearing A/c……......Dr $ 10000


Liability A/c (Payable)….…Cr $ 10000

When we create Fixed Asset in FA

Asset cost A/c…………..Dr $ 25000


Asset clearing A/c…….…Cr $ 25000

When we add CIP (Construction –In- Process) Asset

CIP Cost A/c…....Dr $ 50000


CIP Clearing A/c…Cr $ 50000

When you Capitalize the CIP Asset

Asset Cost A/c……Dr $ 10000


CIP clearing A/c….Cr $ 10000

When Depreciation is calculated

Depreciation Expense A/c......…Dr $ 1000


Accumulated Depreciation A/c…Cr $ 1000

When we retire the asset with removable cost

Accounts Receivable A/c…….......Dr $ 5000


Proceeds of Sale Clearing A/c…...Cr $ 5000
Cost of Removal Clearing A/c…....Dr $ 1000
Accounts Payable A/c………....…...Cr $ 1000
When we retire the asset

Accumulated Depreciation A/c…...Dr $ 2500


Proceeds of Sale clearing A/c…....Dr $ 2000
Revaluation Reserve A/c……….......Dr $ 600
Asset Cost A/c………………….......…Cr $ 4000
Cost of removal clearing A/c…...…Cr $ 500
Gain/Loss A/c…………………….........Cr $ 600

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