The Book Value of an Asset Will Equal Its Fair

question 4

Multiple Choice

The book value of an asset will equal its fair market value at the date of sale if

• A) a gain on disposal is recorded.
• B) no gain or loss on disposal is recorded.
• C) the plant asset is fully depreciated.
• D) a loss on disposal is recorded.

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Definitions:

Discharged Debt

Debt that has been forgiven or cancelled, legally releasing the debtor from the obligation to repay.

Late Charges

Fees imposed for not meeting the payment deadlines as stipulated in a contract or agreement.

Option Contract

A contract granting the holder the right, but not the obligation, to buy or sell an asset at a specified price within a set period.

Consideration

Something of value exchanged by parties that forms the basis of a contract, making it legally binding.