To effectively record sale of assets in QuickBooks, you need to follow a structured process that ensures accurate accounting and reflects the transaction correctly in your financial records. This guide will walk you through the steps necessary for this process, addressing both the sale and any depreciation that may apply.
Understanding Asset Sales in QuickBooks
When you sell a fixed asset, such as a vehicle or equipment, it’s essential to account for the sale properly. This involves recognizing any gain or loss on the sale, which can affect your financial statements and tax obligations. QuickBooks allows you to manage these transactions through journal entries and bank deposits.
Steps to Record Sale of Assets in QuickBooks
1. Prepare for the Sale
Before recording the sale, ensure that the asset is already listed in your QuickBooks account. If it’s not, you will need to set it up as a fixed asset first.
2. Create a Journal Entry
To record the sale of assets in QuickBooks, follow these steps:
- Navigate to the Journal Entry Screen: Click on the “+ New” button on the left-hand menu, then select “Journal Entry” under the “Other” column.
- Enter the Date and Title: Set the date of the transaction and give it a relevant title for easy identification.
- Input the Sale Information:
- Debit the Bank Account: Enter the amount received from the sale in the bank account where the funds will be deposited.
- Credit the Asset Account: Record the original purchase price of the asset to remove it from your books.
- Account for Depreciation: If applicable, include a line to record any accumulated depreciation, which adjusts the asset's value.
For example, if you sold a vehicle for $14,700 that was originally purchased for $15,172 with $472 in depreciation, your journal entry would look like this:
| Account | Debit | Credit |
|---|---|---|
| Bank Account | $14,700 | |
| Accumulated Depreciation | $472 | |
| Vehicle Asset | $15,172 |
3. Save the Journal Entry
Once you have filled in all the necessary information, click “Save and Close” to finalize the entry.
4. Record the Bank Deposit
After saving the journal entry, you will need to record the actual deposit of the sale proceeds:
- Go to the “+ New” button again and select “Bank Deposit.”
- Choose the bank account where the sale proceeds were deposited.
- Enter the amount received and select the appropriate income account for the sale.
5. Match the Bank Feed
If you are using bank feeds in QuickBooks, make sure to match the deposit you recorded with the actual transaction in your bank feed for accurate reconciliation.
Conclusion!
By following these steps, you can successfully record the sale of assets in QuickBooks. This process not only ensures that your financial records are accurate but also helps you maintain compliance with accounting standards. If you have any further questions about how to record sale of assets in QuickBooks, consider consulting with a financial professional or utilizing QuickBooks support resources for more detailed guidance.
