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This information applies to MYOB AccountRight version 19. For later versions, see our help centre.
https://help.myob.com/wiki/x/vwac
ANSWER ID:9103
This support note explains how trade-ins are accounted for in your software. The example we'll use is a motor car trader who has received a trade-in.
[Australia only]
Note: The N-T (No-Tax/Not Reportable) Tax Code is used exclusively throughout this support note. Please check your GST reporting obligations with your accountant or the ATO and then use the appropriate Tax Code.
[New Zealand only]
Note: The N-T GST Code is used exclusively throughout this support note. Please check your GST reporting obligations with your accountant or the IRD and then use the appropriate GST Code.
How do I setup my company file to record trade-ins?
Before recording any trade-in transactions, you will need to setup:
- a new asset banking account - to be used as a clearing account to 'hold' the value of the trade-in
- a new inventory item - to be used to deduct the trade-in amount from the sale and deposit the deduction to the Trade-in Clearing account
Setting up an asset banking account
This account will be used as a clearing account to 'hold' the value of the trade-in.
- Go to the Accounts command centre and click Accounts List.
- Click the Asset tab then click New.
- Select Bank in the Account Type drop-down menu.
- Give the account a unique number that suits your account list.
- Name the account Trade-in Clearing Account.
- Click OK. The following window shows the setup of an example Trade-in Clearing account.
Setup a new inventory item
This item is used to deduct the trade-in amount from the sale and deposit the deduction to the Trade-in Clearing account (created in the previous task in this support note).
- Go to the Lists menu and choose Items.
- Click New.
- Enter an Item Number, such as Trade, and enter an Item Name, such as Trade-in item.
- Select the I Sell This Item option.
- Enter the Trade-in Clearing account in the Income Account for Tracking Sales field - this will be the account created in the previous task in this support note. If you receive a warning message regarding the type of account selected, click OK to this message.
- Click the Selling Details tab and enter the relevant
[Australia only]
Tax Code When Sold[New Zealand only]
GST Code When Sold . - Click OK .
The window below shows the setup of an example Trade-in item.
How do I record a sale that includes a trade-in?
There are three tasks to record a trade-in:
1. Record the sale Invoice that includes the trade-in deduction
2. Create a Bill for the purchase of the trade-in item
3. Close the Bill for the trade-in item
Task 1 - Record the sale Invoice that includes the trade-in deduction
After creating a Card for the customer:
- Go to the Sales command centre and click Enter Sales.
- Select the Customer's Card.
- Enter the Invoice # and Date.
- On the first line, enter the Ship quantity of the item being sold, enter the Item Number, Description and Price.
- On the second line, enter a negative one (-1) in the Ship field. Enter the Item Number of the new Item that was setup and then enter the Price, being the value of the trade-in.
- Enter the other transaction details as required then click Record.
The above steps will deduct the value of the trade-in from the sale and deposit it into the Trade-in Clearing account which is the linked account for the Trade-in Item.
The window below shows a sample Invoice with the trade-in deduction.
[Australia only]
[New Zealand only]
Task 2 - Create a Bill for the purchase of the trade-in item
Before recording the Bill, you will first need to setup a Supplier type Card for the customer, and an Item for the 'thing' being traded in. When setting up this Item, ensure that the I Purchase This Item option is activated and that the relevant cost of sales account (5-xxxx) is selected (You may also want to select the I Inventory This Item and also the I Sell This Item options).
- Go to the Purchases command centre and click Enter Purchases.
- Select the Supplier Card that was specifically setup for the customer.
- Click the Layout button, choose Item and click OK.
- Enter the Purchase #, Date, Memo and the other purchase details.
- Enter the quantity Received, Item Number, and then enter the Price - using the same price as entered for the trade Item on the sales Invoice. Enter this amount as a positive, for example $2500.00.
- Check the transaction then click Record.
The window below shows a sample Bill for a traded-in item.
[Australia only]
[New Zealand only]
Task 3 - Close the Bill for the trade-in item
The Trade-in Clearing account, which was used to enter the trade-in deduction, is used to pay the Bill for the purchase of the trade-in item. This will post a withdrawal to the Trade-in Clearing account, leaving it with a zero balance.
- Go to the Purchases command centre and click Pay Bills.
- Select the Supplier Card that was specifically created for the customer.
- Select the Pay From Account option then enter the Trade-in Clearing account in the adjacent Account field.
- Enter the Memo, Date and Amount.
- Enter the Amount Applied against the Bill for the trade-in item.
- Check the transaction details then click Record.
The window below shows a sample of the Pay Bills transaction. This will close the Bill and clear the Trade-in Clearing account balance.
[Australia only]
[New Zealand only]