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:

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns.

Dissolves

To formally end or terminate something, such as a contractual agreement or a business entity like a corporation.

Corporation

A legal entity that is separate from its owners, with an independent existence that allows it to own property, enter contracts, and be liable for its actions.

General Partner

A member of a partnership who has unlimited liability and takes part in the daily operations of the business.