Accounting JAMB

Which of the following accounts is debited when a delivery van is sold for cash?

A. sales account
B. delivery van account
C. cash account
D. profit and loss accounts

Correct Answer:

Option C – cash account

Explanation

if there was a Loss on sale, we Debit cash for the amount received, debit all accumulated depreciation, debit the loss on sale of asset account, and credit the fixed asset.
if there was a Gain on sale. Debit cash for the amount received, debit all accumulated depreciation, credit the fixed asset, and credit the gain on sale of asset account.

Cash is received and expected to be debited going by the principles of double entry.

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