And what about A + 1. when K = 1 and C0 = 0 ??

it will not perform A+1 in this case, instead it will perform A-1....

it will be like, a_{n-1}a_{n-2}a_{n-3}.....a_{0} + 1111.....11 // all 1's in 2's complement represent -1, so

finally it will be a_{n-1}a_{n-2}a_{n-3}.....a_{0} - 1 = A-1