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WAEC Financial Accounting 2012 Question 50

Question 50

Depreciation

A loss made on the disposal of a fixed asset is debited to

  1. A.Sales Account.
  2. B.Purchases Account.
  3. C.Profit and Loss Account.
  4. D.Capital Account.
Show the answer and explanation

Answer: C (Profit and Loss Account.)

Explanation

A loss on disposal is an expense of the period, so it is debited to the Profit and Loss Account.