Summary AQA A-level Accounting: Introduction to Financial Accounting

DISPOSALS AND PART EXCHANGES

When a non-current asset is sold or disposed, you use:
The original cost of the non-current asset, Provision for depreciation, Cash from sale

The disposals a/c helps to calculate profit or loss on sale of the asset, known as over-provision or under

Profit on sale Loss on sale
Debit disposals account Debit income statement
Credit income statement (with the profit on sale) Credit disposals account (with the loss on sa
A profit on sale of the asset will be put in other income A loss on sale of the asset will be put in expe


Part Exchanges (can part exchange a non current asset for another instead of selling it)
You show disposals as normal

Debit part exchange allowance in the non current asset account and Credit disposals account
Debit remainder of the purchase cost in non current asset account and Credit bank

, Disposals




Part exchange