A company sold an asset for Rs 4,000, whose book value was Rs 3,000. Which of the following will be correct, if asset disposal account is maintained by the company.

Asset account credit Rs. 4,000

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Asset disposal account credit Rs. 3,000

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Cash account debit Rs. 4,000

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Both B & C

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Solution

The correct option is D
Both B & C

The correct entry would be-
Cash A/c Dr. 4,000
To Asset Disposal A/c 3,000
To Profit and Loss A/c 1,000

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A company sold an asset for Rs 4,000, whose book value was Rs 3,000. Which of the following will be correct, if asset disposal account is maintained by the company.

The correct option is D Both B & C The correct entry would be- Cash A/c Dr. 4,000 To Asset Disposal A/c 3,000 To Profit and Loss A/c 1,000

The correct option is D
Both B & C

The correct entry would be-
Cash A/c Dr. 4,000
To Asset Disposal A/c 3,000
To Profit and Loss A/c 1,000