If a Plant Asset Is Retired Before It Is Fully

question 145

Multiple Choice

If a plant asset is retired before it is fully depreciated, and the residual value received is less than the asset's book value,

• A) a gain on disposal occurs.
• B) a loss on disposal occurs.
• C) there is no gain or loss on disposal.
• D) additional depreciation expense must be recorded.

---

Definitions:

Fiscal Year

A 12-month period that a company uses for accounting purposes and preparing financial statements, which may or may not align with the calendar year.

Master Budgets

A comprehensive financial planning document that consolidates all of a company's budgets, serving as a financial roadmap.

Fiscal Year

A 12-month period used for accounting and financial reporting purposes, which may not align with the calendar year.

Quarterly Income Statement

A financial report that displays a company's revenues, expenses, and net income over a three-month period.