If a Plant Asset Is Retired Before It Is Fully

question 85

Multiple Choice

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

• A) a gain on disposal occurs.
• B) a loss on disposal occurs.
• C) either a gain or a loss can occur.
• D) neither a gain nor a loss occurs.

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Definitions:

Cash Cycle

The period of time it takes for a company to convert its investments in inventory back into cash, reflecting how efficiently a company manages its assets.

Credit Terms

Credit terms are the conditions under which a seller extends credit to a buyer, specifying the repayment period, discount for early payment, and applicable interest charges.

Liberal Credit Terms

Credit conditions that are more favorable to the borrower, such as longer repayment periods or lower interest rates.