Transaction Type Debit Credit
Asset Acquisition (usually does not post)Long Term Asset account (1)Fixed Asset Credit account (2)
Period/Annual depreciation
 
Depreciation Expense (3)Accumulated Depreciation account (4)
Improvement TransactionLong Term Asset account (1)Fixed Asset Credit account (2)
Disposal:
Sale price = net book value
Accumulated Depreciation account (4)

Disposal Proceeds account (5)
Long Term Asset account (1)
Disposal:
Sale price greater than net book value
Accumulated Depreciation account (4)

Disposal Proceeds account (5)
 
Long Term Asset account (1)

Disposal Gains account (6)
Disposal:
Sale price less than net book value
Accumulated Depreciation account (4)

Disposal Proceeds account (5)

Disposal Loss account (7)
Long Term Asset account (1)

 



Notes:

(1) Long Term Asset account Account created for the type of fixed asset such as land, buildings, furniture and fixtures

(2) Fixed Asset Credit account Defined in Configuration, Default Accounts. Example: construction-in-progress account

(3) Depreciation Expense Defined on the GL distribution tab of the Asset record

(4) Accumulated Depreciation account Defined in Configuration, Default Accounts

(5) Disposal Proceeds account Defined in Configuration, Default Accounts

(6) Disposal Gain account Defined in Configuration, Default Accounts. Account created for gains on the sale of fixed assets.

(7) Disposal Loss account Defined in Configuration, Default Accounts. Account created for a loss on the sale of fixed assets.