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Chapter 7

1.2 Accounting for disposal of a non-current asset

Step 1 Step 2 Step 3
 Debit – Disposal  Debit –  Debit – Cash

account Accumulated account
 Credit – Non- depreciation  Credit – Disposal
current asset account account
account  Credit – Disposal
account

The balance on the disposal account represents the profit or loss on
disposal and should be transferred to the statement of profit or loss.

Tutor notes guidance – discussion points

Take students through TYU 1 from Chapter 8 of the Study Text.

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