An organisation's asset register shows a carrying amount of $145,600. The non-current asset account in the nominal ledger shows a carrying amount of $135,600. The difference could be due to a disposed asset not having been deducted from the asset register. Which one of the following could represent that asset? A Asset with disposal proceeds of $15,000 and a profit on disposal of $5,000 B Asset with disposal proceeds of $15,000 and a carrying amount of $5,000 C Asset with disposal proceeds of $15,000 and a loss on disposal of $5,000 D Asset with disposal proceeds of $5,000 and a carrying amount of $5,000
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
An organisation's asset register shows a carrying amount of $145,600. The non-current asset account in
the nominal ledger shows a carrying amount of $135,600. The difference could be due to a disposed
asset not having been deducted from the asset register. Which one of the following could represent that
asset?
A Asset with disposal proceeds of $15,000 and a profit on disposal of $5,000
B Asset with disposal proceeds of $15,000 and a carrying amount of $5,000
C Asset with disposal proceeds of $15,000 and a loss on disposal of $5,000
D Asset with disposal proceeds of $5,000 and a carrying amount of $5,000
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