Stock Transfer To Fixed Assets

• Your original entry (Asset Dr. / Purchase Cr.) is wrong
• Reverse it: Purchase Dr. / Asset Cr.
• Pass correct entry: Asset Dr. / Stock Cr.
• If prior year → adjust via opening balance / prior period
• Clean books before merger to avoid complications

Sir, the Purchase A/c was intentionally credited because the cost of this stock item was originally captured in the Purchase account. When the item was converted into a Fixed Asset, crediting Purchase reverses that cost from expenses and debits it to the Asset — which is the correct treatment. In Tally, this entry also adjusts the stock valuation automatically. There was no need to credit the Stock ledger separately, as the cost flow was coming from Purchase, not from Stock."