BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Profit or loss made on sale of old assets is recorded in
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Income and Expenditure account
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Receipts and payments account
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Balance sheet
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Trading account
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Explanation:
Detailed explanation-1: -Profit on sale of fixed asset is shown in income and expenditure account.
Detailed explanation-2: -Also, if a company disposes of assets by selling with gain or loss, the gain and loss should be reported on the income statement.
Detailed explanation-3: -When there is a gain on the sale of a fixed asset, debit cash for the amount received, debit all accumulated depreciation, credit the fixed asset, and credit the gain on sale of asset account.
Detailed explanation-4: -You report gains on the sale of assets as non-operating income on your income statement. To measure the gain, subtract the value of the asset in your ledgers from the sale price.
There is 1 question to complete.