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September 30, 2020 at 9:43 pm
Sir please in the previous lectures on non-current assets, you said when we are to credit the non-current asset with disposal, you credit it with the original cost of the asset that was sold but here you credited it with the net book value. So please which is which?
John Moffat says
October 1, 2020 at 9:28 am
In this example, if we knew the cost of the asset and the accumulated depreciation, then we would make the full entries (credit cost, debit disposal; and debit accumulated depreciation, credit disposal).
However we don’t know the cost and accumulated depreciation here. All we know is the net book value, so we credit net book value with the book value of the asset sold.
October 1, 2020 at 6:20 pm
Understood. Thank you Sir.
October 2, 2020 at 9:12 am
You are welcome 🙂
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