POA notes for Non-current assets and their depreciation
Double entries to memorize for Non-current assets and their depreciation
Purchase of non-current assets on credit
Dr Non-current assets +Assets (debit nature)
Cr Trade payables- Name of supplier +Liabilities (credit nature)
Purchase of non-current assets with cash
Dr Non-current assets +Assets (debit nature)
Cr Cash at bank/ Cash in hand -Assets (debit nature)
Recording depreciation
Dr Depreciation on non-current assets +Expense (debit nature)
Cr Accumulated depreciation +Contra asset (credit nature)
1
, The following 5 double entries are for the sale of non-current assets
Removal of non-current assets
Dr Sale of non-current assets Temporary account. Has no nature
. Cr Non-current asset -Assets (debit nature)
Removal of accumulated depreciation
Dr Accumulated depreciation -Contra asset (credit nature)
Cr Sale of non-current assets Temporary account. Has no nature
Collection of sales proceeds
Dr Cash at bank/ Cashin in hand/ Other receivables +Asset (debit nature)
Cr Sale of non-current asset Temporary account. Has no nature
Gain on the sale of non-current assets
Dr Sale of non-current asset Temporary account. Has no nature
Cr Income summary +Income (credit nature)
Loss on the sale of non-current assets
Dr Income summary -Income (credit nature)
2
Double entries to memorize for Non-current assets and their depreciation
Purchase of non-current assets on credit
Dr Non-current assets +Assets (debit nature)
Cr Trade payables- Name of supplier +Liabilities (credit nature)
Purchase of non-current assets with cash
Dr Non-current assets +Assets (debit nature)
Cr Cash at bank/ Cash in hand -Assets (debit nature)
Recording depreciation
Dr Depreciation on non-current assets +Expense (debit nature)
Cr Accumulated depreciation +Contra asset (credit nature)
1
, The following 5 double entries are for the sale of non-current assets
Removal of non-current assets
Dr Sale of non-current assets Temporary account. Has no nature
. Cr Non-current asset -Assets (debit nature)
Removal of accumulated depreciation
Dr Accumulated depreciation -Contra asset (credit nature)
Cr Sale of non-current assets Temporary account. Has no nature
Collection of sales proceeds
Dr Cash at bank/ Cashin in hand/ Other receivables +Asset (debit nature)
Cr Sale of non-current asset Temporary account. Has no nature
Gain on the sale of non-current assets
Dr Sale of non-current asset Temporary account. Has no nature
Cr Income summary +Income (credit nature)
Loss on the sale of non-current assets
Dr Income summary -Income (credit nature)
2
