SALE OF NCA PART 1

SALE OF NCA account =

• expense

• income

• neither

GAIN on sale of NCA = profit

• INCREASE

• DECREASE

Selling price < Net Book Value =

• GAIN on sale of NCA

• LOSS on sale of NCA

To REMOVE an NCA when sold

• DR nca CR sale of nca

• DR sale of nca CR nca

To REMOVE the accumulated depreciation of the asset sold

• DR acc dep CR sale of nca

• DR sale of nca CR acc dep

To record the SALES PROCEEDS from the sale of the nca

• DR cash/tr CR sale of nca

• DR sale of nca CR cash/tr

To TRANSFER a LOSS on the sale of nca

• DR income summary CR sale of nca

• DR sale of nca CR income summary

You do NOT need to charge depreciation in the year of sale.

• True

• False

LOSS on sale of nca is shown in the

• other income

• other expenses

Selling price = Net book value of NCA

• GAIN on sale of nca

• LOSS on sale of nca

• NO gain and NO loss