What is the journal entry of purchase machinery?
Journal Entries:Purchase of Fixed Assets and liabilitiesDateParticularsDr.
(Rs.)5fCash A/C Dr.
To Machinery A/C To P/L (profit on sale)A/C (Being machinery costing Rs.
40,000 sold at profit)50,0005gMachinery A/C Dr.
To Cash A/C (Being machinery purchased and paid with its delivery charge)1,00,0007 more rows•Aug 15, 2013.
Is equipment purchase an expense?
The purchase of equipment is not accounted for as an expense in one year; rather the expense is spread out over the life of the equipment. This is called depreciation. From an accounting standpoint, equipment is considered capital assets or fixed assets, which are used by the business to make a profit.
How do you record an asset purchased on credit?
On the assumption that the asset was purchased on credit, the initial entry is a credit to accounts payable and a debit to the applicable fixed asset account for the cost of the asset. The cost of an asset can include any associated freight charges, sales taxes, installation fees, testing fees, and so forth.
What is journal entry for credit sales?
What are Credit Sales? Credit sales refer to a sale. The sales and receipts classes of transactions are the typical journal entries that debit accounts receivable and credit sales revenue, and debit cash and credit accounts receivable in which the amount owed will be paid at a later date.
What is depreciation journal entry?
The basic journal entry for depreciation is to debit the Depreciation Expense account (which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the amount of fixed assets). …