Wherever you sell an asset, you convert it into a liquid asset like cash. Recording such transactions is essential because they help you in creating accurate reports. Further, QuickBooks also enables you to record any commission on the sale of the asset. Like always, you will have to select the appropriate taxes.
Read More: How to use fixed asset manager with QuickBooks?
To record the sales of an asset in QuickBooks, follow the steps provided below:
- Calculate the Depreciation if it is applicable on the product.
- Debit the Accumulated Depreciation through a journal entry.
- Credit the amount for the asset which was sold.
- Debit the cash amount received on selling the seet.
- Credit the Profit or Loss on the sale of the asset. You can create a Profit/Loss income account to record the same.
Read More: How to Record a Loan Receivable in QuickBooks?
You can also create a sales commission by following the steps provided below:
- From the Settings menu, click on Products and Services
- Click on New.
- Click on Services.
- Mark the ‘I sell this product/service to my customers‘ checkbox and input the required information.
- Click on Save and Close.
- Use this newly created service item on the sales receipt when recording the commission on the sale of the asset.
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Question: We sold an asset that had already been fully depreciated. So, how can I prove that a fixed asset has been sold?
Answer: You’ll need to make a journal entry to delete the asset and the depreciation expense from your books: debit the accumulated depreciation, credit the asset that was sold, debit the cash account (I’m guessing you received cash), and ultimately credit the gain on asset sale – this should be a gain account type. If you’ve withdrawn your assets, your book balance will be zero. Because your book balance is zero, the cash received would be a gain if fully depreciated.