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.
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.
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.
Author - TallySchool
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