When a fixed asset is disposed off, the accounting entries to write off the asset are Debit
-
A.
Profit and loss account; credit asset disposal account -
B.
Asset disposal account; credit profit and loss account -
C.
Asset disposal account, credit asset account -
D.
Profit and loss account; credit provision for depreciation account
Correct Answer: Option C
Explanation
How to record the disposal of assets
- No proceeds, fully depreciated. Debit all accumulated depreciation and credit the fixed asset.
- Loss on sale. Debit cash for the amount received, debit all accumulated depreciation, debit the loss on sale of assetaccount, and credit the fixed asset.
- Gain on sale.