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WAEC Financial Accounting 2016 Question 48

Question 48

Depreciation

When a fixed asset is disposed off, the accounting entries to write off the asset are Debit

  1. A.Profit and Loss Account, Credit Asset Disposal Account.
  2. B.Asset Disposal Account, Credit Profit and Loss Account.
  3. C.Asset Disposal Account, Credit Asset Account.
  4. D.Profit and Loss Account, Credit Provision for Depreciation Account.
Show the answer and explanation

Answer: C (Asset Disposal Account, Credit Asset Account.)

Explanation

The asset's cost is moved out of the asset account into the disposal account: debit disposal, credit asset.