Question

When a part of the asset is sold and provision for depreciation account exists, which new account is formed ?

• A. Depreciation account
• B. Use of Asset Disposal Account
• C. provision for depreciation account
• D. Asset account

Answer 1

Answer: (B)

Use of Asset Disposal Account

Option B is the correct one.
A disposal account is a gain or loss account that appears in the income statement, and in which is recorded the difference between the disposal proceeds and the net carrying amount of the fixed asset being disposed of.