A Truck Costing $132,000 Was Destroyed When Its Engine Caught

question 237

Multiple Choice

A truck costing $132,000 was destroyed when its engine caught fire.At the date of the fire, the accumulated depreciation on the truck was $60,000.An insurance check for $150,000 was received based on the replacement cost of the truck.The entry to record the insurance proceeds and the disposition of the truck will include a

• A)Gain on Disposal of $18,000.
• B)credit to the Truck account of $72,000.
• C)credit to the Accumulated Depreciation account for $60,000.
• D)Gain on Disposal of $78,000.

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Definitions:

Account

A record within financial bookkeeping that tracks financial transactions of a specific nature.

Revenue

The total earnings from goods or services sold, stemming from a company's main operational activities.

Financial Statements

Reports that summarize the financial performance and position of a business, including income statement, balance sheet, and cash flow statement.

Business Transactions

Economic events that affect the financial position of a company and can be quantified in monetary terms.