The sale of a plant asset should not be recorded in the sales account. The sales account is used to report a retailer's sale of merchandise or a manufacturer's sale of products. In other words, sales result from a company's main revenue producing activities.

The sale of a plant asset is a "peripheral" activity and does not qualify as sales revenues. Rather, the gain or loss on a sale of a plant asset is reported on the income statement as a separate item. Often this item is included in a section labeled as "other" or "nonoperating." (The gain or loss is the difference between the proceeds from the sale of the plant asset and the plant asset's carrying value at the time of the sale.)

The proceeds from the sale of the plant asset is reported as a positive amount in the investing activities section of the statement of cash flows.

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