What is the accounting entry for the acquisition of a motor car as a non-current asset?

The accounting entry for the acquisition of a motor car, classified as a non-current asset, is accurately reflected by debiting the Non-Current Asset account and crediting Bank or Payables. This entry represents the acquisition of the motor car, indicating that the organization is gaining a long-term asset that will be used over time, thereby facilitating business operations.

By debiting the Non-Current Asset account, the motor car is recorded at its full cost, which represents the value of the investment in that asset. The crediting of Bank or Payables reflects the source of the funds used for this acquisition. If the car is purchased outright, the Bank account is credited to represent the cash spent for the car. If the purchase involves a financing arrangement or credit terms, the Payables account is credited, indicating an obligation to pay in the future.

This entry is part of the double-entry bookkeeping system, which ensures that every financial transaction maintains the accounting equation (Assets = Liabilities + Equity) in balance. Thus, the transaction accurately captures both the asset being acquired and the corresponding liability or cash outflow that results from that acquisition.