Accounting for IGCSE & O level - Accounting Procedures (Section 26 - No. 46)
What is the correct order of accounting steps regarding the disposal of an asset?
Record proceeds, Calculate gain or loss, Remove asset from ledger
Remove asset from ledger, Record proceeds, Calculate gain or loss
Calculate gain or loss, Record proceeds, Remove asset from ledger
Remove asset from ledger, Calculate gain or loss, Record proceeds
Explanation
The common steps are to first record the proceeds, calculate the gain or loss (proceeds - book value) and then remove the asset and all associated information from the ledger.
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