A Loss on Disposal of a Long-Lived Asset Is Reported

question 211

Multiple Choice

A loss on disposal of a long-lived asset is reported in the financial statements

• A) as an increase to depreciation expense in the income statement.
• B) in the operating expenses section of the income statement.
• C) as a direct increase to the capital account on the balance sheet.
• D) as a direct decrease to the capital account on the balance sheet.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, distributing profits.

Revised Model Business Corporation Act

An influential model law that suggests legal standards and practices for the formation, operation, and dissolution of corporations in the United States.

Book Value

The net value of a company's assets minus its liabilities and preferred stock, reported on the balance sheet.

Legal Asset Distributions

The process of dividing and distributing a company's assets to shareholders, creditors, or heirs following legal rules.