Which of the Following Is Correct When Recording the Disposal

question 93

Multiple Choice

Which of the following is correct when recording the disposal of equipment for a gain?

• A)A debit to a gain account.
• B)A credit to the equipment account for the asset's book value.
• C)A debit to accumulated depreciation for the depreciation accumulated to the date of disposal.
• D)A credit to cash.

---

Definitions:

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from revenue; also known as supernormal profits.

Industry Growth

The increase in the production or sales in a particular industry over a specific period, often driven by factors such as technological advances and increases in demand.

Normal Profits

The required minimum level of profit needed for a company to remain competitive in the market; it is part of the firm's opportunity costs.

Short-run Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable, often in a temporal context.