Making a sold fixed asset account inactive...

Anonymous · ‎March 01, 2020

I just sold one of my tractors. I debited my bank account and "Loss on Sale of Fixed Assets" account (I sold it for slightly less than my book value), and credited the parent account for the tractor (not the depreciation account of original cost account). Two questions... 1. Does it look like I recorded the sale properly? 2. Can I make the account (well, three accounts - tractor, depreciation, and original cost accounts) inactive? I understand that QBO will make an "adjusting transaction" to keep the financial information on the books, but other than that I'm not sure what that means. Thanks.

vpcontroller · ‎March 01, 2020

@Anonymous

"Can I make the account (well, three accounts - tractor, depreciation, and original cost accounts) inactive?"

You need to reverse the depreciation account and original cost account, not the parent tractor account.

For example, your entry should be:

Original cost = $1,000 (credit)
Depreciation = $500 (debit)
Sold it = $400 (debit deposit)
Loss on sale of FA = $100 (debit)

You can make accounts inactive once the balance is zero.

Hope this helps!

View solution in original post

vpcontroller · ‎March 01, 2020

@Anonymous

"Can I make the account (well, three accounts - tractor, depreciation, and original cost accounts) inactive?"

You need to reverse the depreciation account and original cost account, not the parent tractor account.

For example, your entry should be:

Original cost = $1,000 (credit)
Depreciation = $500 (debit)
Sold it = $400 (debit deposit)
Loss on sale of FA = $100 (debit)

You can make accounts inactive once the balance is zero.

Hope this helps!

Anonymous · ‎March 02, 2020

@vpcontroller Sure does. Thanks!

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Making a sold fixed asset account inactive...