If a Plant Asset Is Retired Before It Is Fully

question 291

Multiple Choice

If a plant asset is retired before it is fully depreciated and no salvage or scrap value is received

• A) a gain on disposal will be recorded.
• B) phantom depreciation must be taken as though the asset were still on the books.
• C) a loss on disposal will be recorded.
• D) no gain or loss on disposal will be recorded.

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Definitions:

Higher Prices

A scenario where the cost of goods or services rises, which can be due to increased demand, reduced supply, or inflation.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the financial gain exceeding the opportunity costs.

Exit Of Firms

The process when businesses stop operations and leave a market, often due to unprofitability or strategic realignment.

Market Entry

The process or strategy by which a company enters a new market, facing and overcoming barriers to entry.