Accounting for IGCSE & O level - Accounting Procedures (Section 5 - No. 7)
Which of these is the correct order of journal entries for a disposal?
Debit Cash/Bank, Debit Accumulated Depreciation, Credit Asset, Credit Loss/Debit Gain
Debit Asset, Credit Accumulated Depreciation, Debit Loss/Credit Gain, Debit Cash/Bank
Debit Accumulated Depreciation, Credit Asset, Debit Loss/Credit Gain, Debit Cash/Bank
Debit Cash/Bank, Credit Accumulated Depreciation, Credit Asset, Debit Loss/Credit Gain
Explanation
First, you remove accumulated depreciation. Then remove the asset. Finally, record the cash from the sale and the gain/loss.
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