TRANSFER A STOCK ITEM TO FIXED ASSET

A2000 ONLINE SUPPORT DEPARTMENT

KNOWLEDGE BASE

DESCRIPTION         How to transfer a stock item into a fixed asset?

1.  DIFFERENCE IN STOCK & FIXED ASSET

Fixed assets are owned by the business to generate revenue, while inventory is a current asset that can be converted into cash within each business year. From an accounting perspective, fixed assets and inventory stock both represent property that a company owns. Although both are listed under assets on financial reports, they are two different types of assets with unique characteristics. A2000ERP allows a stock item to be reclassified as an asset item.

2.  PROCESS TO TRANSFER (BY JOURNAL)

2.1 ISSUE OUT OF INVENTORY

The stock must be taken out of the inventory, so that it is no longer available for sales. To do this, we use an IT transaction to issue out the item. Assuming, this item has a value of $5,000, the double entries would be:

2.2 RECEIVES INTO FIXED ASSET ACCOUNT

The next step is to recognize this in the books as a Fixed Asset, by performing a journal transaction to reclassify that.

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