The Accumulated Depreciation at the Date of Sale of a Non-Current

question 1

Multiple Choice

The accumulated depreciation at the date of sale of a non-current asset is £25,600. What is the correct double entry to record the removal of this accumulated depreciation on the disposal of the non-current asset in the books of account of an organisation?

• A) Debit depreciation expense £25,600, Credit accumulated depreciation £25,600.
• B) Debit accumulated depreciation £25,600, Credit non-current asset disposals account £25,600.
• C) Debit non-current asset disposals account £25,600, Credit accumulated depreciation £25,600.
• D) Debit accumulated depreciation £25,600, Credit depreciation expense £25,600.

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Definitions:

Simple Rate Of Return

The rate of return computed by dividing a project’s annual incremental net operating income by the initial investment required.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation each year over the asset's useful life.

Working Capital

The gap between a firm's current assets and its current liabilities, reflecting its short-term financial stability.

Net Present Value

A financial metric that calculates the present value of future cash flows minus the initial investment, used in capital budgeting to assess the profitability of investments.