Please clarify my doubt ;
In Asset Disposal - Sale to Customer : F-92 with customer
Suppose an asset with historical cost $1000 and accumulated depreciation of $100 is being sold to a customer at $1100, the posting entries will be as follows :
Dr Customer Account (A/R) 1,100
Dr Accumulated Depreciation 100
Cr Fixed Asset - Acquisition Cost 1,000-
Cr Gain/Loss of Fixed Asset Disposal 200-
Dr Clearing Account for Asset Disposal 1,100
Cr Revenue for Asset Disposal 1,100-
I completely understand the first four line items, but don't know the purpose or the 5th and 6th line items.
Please explain why we need a clearing and revenue account for asset disposal and what would be the impact of these accounts in asset accounting?
Thanks in advance !!!
In F-92 if you select the posting key 50, then 6 line items are posted in the system which are mentioned as above. Whereas if you select posting key 75, then you have to enter the Asset details and then only 4 line items will be posted as above which you are able to understand. The 2 clearing line items are just for the offsetting purpose. In both line items the GL's are same.