General Accounting Interview Question:

Suppose we are selling a device for 6000 and the company want to replace that device with a new device which is a bit more than the prior price say 7000. how we can account this?

Submitted by: Administrator

First we need to write-off the old asset ( by reversing the
asset, accumulated depreciation and depreciation for the
current FY by Cr the Fixed asset Write-off and Dr
Proft/Loss on sale of asset under P&L account )

Next we can capitalised the new asset ( Dr. Asset Cr. Bank )
Submitted by: Administrator