Please suggest the accounting entry that needs to be passed while selling a new car in exchange for an old car.Also suggest the entry when the dealer later reselles the old car as certified pre owned car.
Pranjal (Student CA IPC / IPCC) (531 Points)
23 June 2014Please suggest the accounting entry that needs to be passed while selling a new car in exchange for an old car.Also suggest the entry when the dealer later reselles the old car as certified pre owned car.
Rishit Shah
(Creator TallySchool.com Co-Founder BookNagari.com)
(221 Points)
Replied 25 June 2014
The following entry needs to be passed for your first question.
Cash/Bank A/c Dr.
Old Car A/c Dr.
To New Car A/c.
Secondly for your next question when the dealer later resells the old car as certified pre-owned car.
Cash/Bank A/c. Dr.
To pre-owned certified Old Car A/c.
Please note that the first entry is passed in the books of the seller and the second entry is passed in the books of dealer.
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