Which Statement Is Correct About the Derecognition of an Obligation

question 41

Multiple Choice

Which statement is correct about the derecognition of an obligation before maturity?

• A)There will be a gain on retirement.
• B)There will be a loss on retirement.
• C)There will be no gain or loss on retirement.
• D)There could be either a gain or loss on retirement.

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Definitions:

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, organized by account.

Subsidiary Ledger

A subsidiary ledger is a detailed ledger that contains account-specific information, supporting and connected to the general ledger for a comprehensive accounting system.

Sales Journal

A dedicated journal used to record a company's sales transactions, tracking the selling of goods and services.

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.