What is Journal Entry for Purchase of Assets for Non Trading Concern?

>> January 28, 2011


Q :- If I purchase an Asset (furniture, UPS, UPS Batteries, etc.) for non trading concern, shall I pass the Journal Entry, or shall I make entry in Purchase A/c ? If I purchase for Cash, or on Credit. Please answer my question.

Answer :
Before telling you what will the journal entry of this transaction, I want to make you understand that there will not effect on the journal entries whether you are doing business or doing any social activities. Because assets are purchased for non trading concern. It means these fixed assets are for charitable organisation who is not earning profit from this organisation. But  because the assets you have mentioned, are not stock. So, will debit the specific asset and following journal entry will pass.

Particular Asset Account Dr. XXXX

Cash or Name or Party Account ( In case purchase on credit ) Cr. XXXX





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