The loss on sale of old scooter is debited to __________.

Depreciation Account

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Scooter Account

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Profit and Loss Account

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None of the above

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Solution

The correct option is C Profit and Loss Account
Loss on account of sale of any asset is an indirect expense and need to be debited to profit & loss account.

Accounting entry will be as under:

Cash/Bank A/c Dr. (with the value of sale price)
Profit & Loss A/c Dr. (with the difference of wdv-sale price)
To scooter A/c (with the WDV)

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