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WAEC Financial Accounting 2012 Question 42

Question 42

Depreciation

The double entry to record the proceeds on disposal of assets is debit

  1. A.Bank Account; credit Asset Disposal Account.
  2. B.Asset Disposal Account; credit Bank Account.
  3. C.Provision for Depreciation Account; credit Asset Disposal Account.
  4. D.Asset Disposal Account; credit Provision for Depreciation Account.
Show the answer and explanation

Answer: A (Bank Account; credit Asset Disposal Account.)

Explanation

Money received goes into the bank (debit Bank), and the sale proceeds are credited to the Asset Disposal Account.