During the financial year ended 30 September, Daria Limited sells a piece of plant and machinery. This piece of plant and machinery had originally cost £30,000 when it was acquired four years ago. What is the correct double entry to record the removal of the cost of this piece of plant and machinery from the books of account of Daria Limited?

Question

Quizplus · Accepted Answer

The correct double entry to remove the cost of the plant and machinery from the books is to debit the non-current asset disposals account and credit the plant and machinery cost account with the original cost of the asset (£30,000). This entry removes the asset from the balance sheet and records the disposal in the disposals account.

During the Financial Year Ended 30 September, Daria Limited Sells