AccountingCode 7707
Accounting for depreciation and disposal of non-current assets
What this topic asks you to be able to do
- the meaning of depreciation
- why depreciation must be recorded in the accounts
- the way to work out depreciation by each of three methods: straight-line, reducing balance and revaluation
- the suitable depreciation methods for different kinds of non-current assets
- how to draft the journal entries and ledger accounts in which depreciation is recorded
- how to draw up journal entries that record the buying and selling of non-current assets
- how to draw up the ledger accounts that record buying and selling non-current assets, namely the disposal of non-current asset account, the provision for depreciation account and the non-current asset account
- how to work out the profit or loss made when a non-current asset is disposed of