Which of the Following Statements Is NOT True When a Fully

question 145

Multiple Choice

Which of the following statements is NOT true when a fully depreciated long-lived asset is retired?

• A) The long-lived asset's carrying amount is equal to its estimated residual value.
• B) The accumulated depreciation account is debited.
• C) The asset account is credited.
• D) The long-lived asset's original cost equals its carrying amount.

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Definitions:

Financial Statement

Documents that provide an overview of a company's financial condition in both short and long term, including balance sheets, income statements, and statements of cash flows.

Permanent/Temporary

In accounting, refers to the classification of accounts based on their longevity; permanent accounts are cumulative over time (e.g., assets, liabilities, equity), while temporary accounts are closed at the end of each accounting period (e.g., revenues, expenses).

Normal Balance

The side (debit or credit) on which increases to the account are recorded, based on the type of account (asset, liability, equity, revenue, expense).

Financial Statement

A written report that quantitatively describes the financial health of a company, including balance sheets, income statements, and cash flow statements.