Why we give accumulated depreciation account as offset account as it is credited

(0) Share

Report

Posted on by subashini

858

Hi Friends,

I read one article in this blog which is related to Disposal setup in fixed assets. In this Disposal posting profile what would be the main account and what would be the offset account. I read that main account would be p&L account but there is no information about offset account. Can anyone clarify this.

and in the Depreciation setup entry would be Depreciation a/c --Dr and Accumulated depreciation a/c Cr but in disposal setup they mention that give the depreciation a/c in main account as it would be credited and accumulated depreciation as offset account as it would be Debited. But as per accounting rules Depreciation comes under expense how it becomes credit here. Can anyone suggest me correct accounts to setup here.

From the past 3 years i am not getting the proper answer for this. Please help me in this with explanation

Thanks

*This post is locked for comments

I have the same question (0)

All responses (1)

Answers (1)

Verified answer

Ludwig Reinhard Microsoft Employee on at

Like (0)

Report

Hi subashini bonkuri,

I would suggest that you take a look at the Microsoft Contoso Demo Company USMF. Please setup a new fixed asset, acquire it and then sell it through a free text invoice. Once you have done all of that check the postings that the system generated and compare them with the Setups in the fixed asset posting profiles. This will help you learning and understanding when each account of the accounts setup in the FA posting profile is used. It is probably a 'cumbersome' way but the best I know to learn when and under which circumstances specific accounts are used.

Best regards,

Ludwig

Was this reply helpful? Yes No