A Loss on Disposal of a Long-Term Asset Is Reported

question 8

Multiple Choice

A loss on disposal of a long-term asset is reported in the financial statements

• A)in the Other Revenues and Gains section of the income statement.
• B)in the Other Expenses and Losses section of the income statement.
• C)as a direct increase to the capital account on the balance sheet.
• D)as a direct decrease to the capital account on the balance sheet.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost of variable overhead allocated to the production based on a predetermined rate.

Variable Overhead Efficiency Variance

Variable Overhead Efficiency Variance is the difference between the standard cost of variable overheads for the actual production and the actual variable overheads incurred, often attributed to efficiency in utilizing variable resources.

Variable Overhead

Indirect production costs that change in response to the level of production activity, such as utility costs in a manufacturing plant that vary with machine usage.

Rate Variances

The difference between the expected (standard) cost and the actual cost incurred for a rate-based expense, such as labor or materials.