An Asset Can Be Disposed of by All of the Following

question 91

Multiple Choice

An asset can be disposed of by all of the following except:

• A)Discarding it.
• B)Selling it.
• C)Exchanging it for another asset.
• D)Donating it to charity.
• E)Continuing to use it after it is fully depreciated.

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Definitions:

Prepaid Insurance

Prepaid insurance is an asset account representing insurance premiums that have been paid in advance and have not yet expired at the time of a balance sheet report.

Balance Sheet

A summary that presents a business's assets, financial obligations, and the equity held by its shareholders for a specific timeframe.

Adjusting Entry

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Accrued Expense

An expense that has been incurred but not yet paid, reflecting in a company's financial statements before the cash changes hands.