Question

profit and loss disposal of asset not taken over by a Ltd company is transferred to ​

Answer 1

The profit or loss on the sale or disposal of the asset is transferred to the Profit & Loss Account.

Explanation:

• When the asset is bought at the cease of its beneficial life, the sale proceeds have to be credited to the Asset A/c.
• The earnings or loss on sale or disposal of the asset is transferred to the Profit & Loss A/c.
• The very cause of profit and loss account is to envision whether or not the commercial enterprise is making earnings or loss for a given duration.
• In different words, the Profit & Loss Account reveals cash spent or price incurred in an organization's attempt to generate revenue, representing the price of doing commercial enterprise.
• When the asset is bought all through its beneficial life, the depreciation has to be charged for the duration the asset is used withinside the yr of sale.
• However, in which the Provision for Depreciation A/c has been maintained then the Provision for Depreciation is transferred to the Asset A/c.

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Answer 2

Answer:

Profit and loss disposal of asset not taken over by a Ltd company is transferred to Profit & Loss A/c.

Explanation:

• A depreciable asset can be retired or sold either at the end of its useful life or during its useful life. An asset may be disposal during its useful life due to obsolescence or other factors.

• When an asset is sold at the end of its life, the sale proceeds should be credited to the asset A/c. the gain or loss on the sale or disposal of the asset is transferred to the income statement.

• If the asset is sold during its useful life, depreciation should be charged for the period the asset is used in the year of sale. However, if the depreciation reserve is maintained, then the depreciation reserve is transferred to asset conditioning.

• Asset disposal, also called derecognition, is the removal of a fixed asset from a company's financial records. If there is a difference between the proceeds from the sale and the book value, a gain or loss arises on the sale.

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