Investment accounting

This query is : Open

Pulkit Gupta (Querist)
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13 March 2013 Respected sir/ma'am
When we sell Fixed asset on profit we pass the following journal entry:

1.Bank A/C Dr.
To Fixed Asset A/C(cost)
To P&L A/C(profit)

But when we sell investments (in the form of shares or debentures) we pass the following entries:

1.Bank A/C Dr.
To Investment A/C(Selling Price)

2.Investment A/c Dr.
To P&L A/C(profit)

Why The difference??????

Sandip R Lathiya

Sandip R Lathiya (Expert)
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13 March 2013 Good Question
1.Fixed assest is our trading investment,but investment is non trading investment so it is doing that thing i.e. diffrance to pass journal entry

Pulkit Gupta

Pulkit Gupta (Querist)
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18 March 2013 Can you please elaborate.......i mean i agree investments are non trading....so dis may be done....but whats d benefit/logic in doing so...???