I attached an exercise for you to download regarding the disposal of asset. Remember, before you dispose any asset, you need to deduct from asset account to make it zero. This is because, when you bought an asset, it will debited to the asset account until you dispose the asset, you need to deduct the same figure from the account. For example, you bought a machine for RM10,000, then you will debit the asset account for RM10,000.
When you hold the asset, you need to depreciate the asset and therefore the depreciation account is created. The accumulated depreciation for the said asset is also being created. As long as you have the asset, you'll need to depreciate and you'll need to accumulate.
But...when you dispose the asset, you'll need to cancel those accounts from the books, Asset gone, no asset means no depreciation. Accumulated depreciation will also need to go.
To learn more about this, please download the exercise and watch this video for further understanding.
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