Purchase and Sale of Fixed Assets: Fixed assets include land, building, plant, machinery, furniture and fixtures, motor car, etc., when fixed asset is purchased, the asset account (individually) is debited. It is not debited to Purchase Account as fixed asset is not for the purpose of sales. Similarly, when fixed asset is sold, it is credited to Asset Account and not to Sales Account. Accounting entries are as follows:
(i) On Purchase of Asset for Cash:
(ii) On Sale of Asset for Cash:
(iii) On Purchase of Asset on Credit:
(iv) On Sale of Asset on Credit:
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