Hi,
Can anyone please give the detailed accounting entries through the Asset Cycle.
Regards
Surya
Accounting Entries Of Assets
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- Posts: 64
- Joined: Mon May 14, 2007 9:47 am
- Location: India
1In PURCHASING while performing PO receipt
Asset Clearing Account Dr
To PO Accrual Account Cr
2.In AP while entering supplier invoice by PO matching
PO Accrual Account Dr
To AP Liability Account Cr
Net accounting entry is
Asset Clearing Account Dr
To AP Liability Account Cr
3. In FA on performing Post Mass Addition
Asset Cost Account Dr
To Asset Clearing Account Cr
The net entry at this stage will be
Asset Cost Account Dr
To AP Liability Account Cr
4. In AP on making payment for the asset purchase
AP Liability Account Dr
To Bank Account Cr
The net accounting effect after payment will be
Asset Cost Account Dr
To Bank Account Cr
Asset Clearing Account Dr
To PO Accrual Account Cr
2.In AP while entering supplier invoice by PO matching
PO Accrual Account Dr
To AP Liability Account Cr
Net accounting entry is
Asset Clearing Account Dr
To AP Liability Account Cr
3. In FA on performing Post Mass Addition
Asset Cost Account Dr
To Asset Clearing Account Cr
The net entry at this stage will be
Asset Cost Account Dr
To AP Liability Account Cr
4. In AP on making payment for the asset purchase
AP Liability Account Dr
To Bank Account Cr
The net accounting effect after payment will be
Asset Cost Account Dr
To Bank Account Cr
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- Posts: 64
- Joined: Mon May 14, 2007 9:47 am
- Location: India
Hi,
I am giving you one example upto asset retirement.
Accounting Entries on Asset Addition
Assuming that an asset cost of Rs.10000 is purchased.
1.In PURCHASING while performing PO receipt
Asset Clearing Account Dr 10,000
To PO Accrual Account Cr 10,000
2.In AP while entering supplier invoice by PO matching
PO Accrual Account Dr 10,000
To AP Liability Account Cr 10,000
Net accounting entry is
Asset Clearing Account Dr 10,000
To AP Liability Account Cr 10,000
3. In FA on performing Post Mass Addition
Asset Cost Account Dr 10,000
To Asset Clearing Account Cr 10,000
The net entry at this stage will be
Asset Cost Account Dr 10,000
To AP Liability Account Cr 10,000
4. In AP on making payment for the asset purchase
AP Liability Account Dr 10,000
To Bank Account Cr 10,000
The net accounting effect after payment will be
Asset Cost Account Dr 10,000
To Bank Account Cr 10,000
On running Depreciation for 1st year (assume 10% Dep)
Depreciation Exp Account Dr 1,000
To Accumulated Depreciation Cr 1,000
Retirement
Suppose the above asset is retired in the end of 4 th year for a sale proceeds of Rs.15,000 and expenses incurred on removal is 2,000 the following are the accounting entries.
Accounting Entries in FA module
Accumulated Depreciation Account Dr 4,000
Proceeds of sale clearing account Dr 15,000
To Asset Cost account Cr 10,000
To Gain on sale of asset account Cr 7,000
To Cost of removal clearing accountCr 2,000
Accounting Entries in AP
Cost of removal clearing account Dr 2,000
To AP Liability account Cr 2,000
Accounting Entries in AR
Receivable Account Dr 15,000
To Proceeds of sale clearing account Cr 15,000
If the sale value of that asset is 5000 then there will be loss
Accumulated Depreciation Account Dr 4,000
Proceeds of sale clearing account Dr 5,000
Loss on sale of asset Account Dr 3,000
To Asset Cost account Cr 10,000
To Cost of removal clearing accountCr 2,000
I hope you are clear now.
Regards,
Dhas
I am giving you one example upto asset retirement.
Accounting Entries on Asset Addition
Assuming that an asset cost of Rs.10000 is purchased.
1.In PURCHASING while performing PO receipt
Asset Clearing Account Dr 10,000
To PO Accrual Account Cr 10,000
2.In AP while entering supplier invoice by PO matching
PO Accrual Account Dr 10,000
To AP Liability Account Cr 10,000
Net accounting entry is
Asset Clearing Account Dr 10,000
To AP Liability Account Cr 10,000
3. In FA on performing Post Mass Addition
Asset Cost Account Dr 10,000
To Asset Clearing Account Cr 10,000
The net entry at this stage will be
Asset Cost Account Dr 10,000
To AP Liability Account Cr 10,000
4. In AP on making payment for the asset purchase
AP Liability Account Dr 10,000
To Bank Account Cr 10,000
The net accounting effect after payment will be
Asset Cost Account Dr 10,000
To Bank Account Cr 10,000
On running Depreciation for 1st year (assume 10% Dep)
Depreciation Exp Account Dr 1,000
To Accumulated Depreciation Cr 1,000
Retirement
Suppose the above asset is retired in the end of 4 th year for a sale proceeds of Rs.15,000 and expenses incurred on removal is 2,000 the following are the accounting entries.
Accounting Entries in FA module
Accumulated Depreciation Account Dr 4,000
Proceeds of sale clearing account Dr 15,000
To Asset Cost account Cr 10,000
To Gain on sale of asset account Cr 7,000
To Cost of removal clearing accountCr 2,000
Accounting Entries in AP
Cost of removal clearing account Dr 2,000
To AP Liability account Cr 2,000
Accounting Entries in AR
Receivable Account Dr 15,000
To Proceeds of sale clearing account Cr 15,000
If the sale value of that asset is 5000 then there will be loss
Accumulated Depreciation Account Dr 4,000
Proceeds of sale clearing account Dr 5,000
Loss on sale of asset Account Dr 3,000
To Asset Cost account Cr 10,000
To Cost of removal clearing accountCr 2,000
I hope you are clear now.
Regards,
Dhas
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