Our company sold an equipment. But in the investing activity in statement of cash flow, it shows the original price of the equipment instead of the selling price. Is there any problem with this report?
Re: Our company sold an equipment. But in the investing activity in statement of cash flow, it sh...
Thanks for your answer!
Yes I think the problem is the way our accountant record the transaction. Actually I think his journal entry is correct. It's like: Credit: Equipment Debit: Accumulated Depreciation Debit: Bank Account (amount we receive) And Gain or Loss on disposal of equipment
But the account under investing activity is just 'equipment' and no other account or sub-account. So it shows original cost of equipment.
In this case, should I create any other journal entry or create a new account?
Several accounts are affected when you sell items. The asset account is where sold items came from. The COGS account is the expense when selling the item. The income account is where the sales price will be posted to. And the bank account where the funds will be deposited to.
That being said, you can open the previous JE and add the markup or create a new one to match the amount.
If you need a report to show both debits and credits for each transaction, you can pull up the General Ledger. This will help reconcile your monthly statements easily since it displays the entry on the transaction. Here's how:
From the left menu, select Reports.
Open the General Ledger.
Go to Rows/Columns, then Change Columns.
Mark Debit and Credit to add these columns.
If you wish to see the current reconcile status for each transaction, click Crl.
Click Filter, then choose Distribution Account.
Select your bank from the drop-down menu, then click Run report.
To show you how account balances are affected by debits and credits in QBO, check this out: Double-entry Accounting.
Upon sharing this, I still recommend consulting with your accountant for specific instructions on what account to debit and credit.
Keep me posted if there's anything else you need and I'd be glad to help.