Which of the Following Statements About Disposal of Long-Lived Assets

question 48

Multiple Choice

Which of the following statements about disposal of long-lived assets is not correct?

• A)The gain or loss resulting from the disposal of a long-lived asset always appears below the "Income from Operations" line on the income statement.
• B)A journal entry is usually needed to update depreciation expense on a long-lived asset at the time of disposal.
• C)A company may dispose of long-lived assets by selling them,trading them in on new assets,or by scrapping them.
• D)The amount of the gain or loss on disposal of a long-lived asset before the end of its useful life will be influenced by the depreciation method that had been used.

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Definitions:

LIFO Inventory Method

"Last In, First Out," an inventory costing method where the last items purchased are the first ones sold, affecting the cost of goods sold and ending inventory value.

Cost Of Goods Sold

The direct costs tied to the production of products sold by a company, including materials and labor.

Merchandise Inventory

Merchandise Inventory includes goods that are purchased and held for resale by a retail or wholesale business, representing one of the primary sources of revenue.

FIFO

An inventory valuation method where the first items purchased or produced are the first ones sold, impacting the cost of goods sold and inventory valuation.