If an Asset Is Fully Depreciated and Retired for Proceeds

question 81

Multiple Choice

If an asset is fully depreciated and retired for proceeds equal to its residual value

• A) a gain on disposal will be recorded.
• B) depreciation must continue to be taken as though the asset were still on the books.
• C) a loss on disposal will be recorded.
• D) no gain or loss on disposal will be recorded.

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Definitions:

Fire Insurance

Fire insurance is a type of property insurance that covers damage and losses caused by fire, providing compensation to the policyholder.

Supplies Expense

Costs associated with consumable items or supplies used during an accounting period.

Supplies Account

An account used to track the cost of supplies used by a business during an accounting period that are not directly tied to production.

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specific period, providing insight into its operational efficiency.