A Company Sells a Piece of Equipment Half-Way Through the Accounting

question 108

Multiple Choice

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of depreciation on the equipment is $40,000 per year.Before recording the asset sale,the company should debit:

• A)depreciation expense for $40,000 and credit accumulated depreciation for $40,000.
• B)accumulated depreciation for $40,000 and credit cash for $40,000.
• C)depreciation expense for $20,000 and credit accumulated depreciation for $20,000.
• D)cash for $20,000 and credit depreciation expense for $20,000.

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Definitions:

Variability

A measure of how spread out or dispersed the scores in a dataset are.

Bell Shaped Histograms

Histograms showing the frequency distribution of data that forms a symmetrical, bell-shaped curve, indicating a normal distribution.

Histograms

Graphical representations of the distribution of numerical data, showing the frequency of data within certain ranges.

Empirical Rule

A statistical norm that asserts for a normally distributed set of data, almost all of the data points are encompassed within three standard deviations from the mean value.