Accounting for IGCSE & O level - Accounting Procedures (Section 16 - No. 20)
What is the purpose of calculating the gain or loss on disposal?
To determine the cash flow from the asset.
To assess the asset's value at disposal.
To reflect the difference between the asset's book value and the proceeds from the sale.
To show the asset's original cost.
Explanation
The gain or loss reflects the difference between the proceeds received and the net book value of the asset, representing the profit or loss on its use during its life.
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