An Asset Was Purchased for $12,000

question 27

Multiple Choice

An asset was purchased for $12,000.The asset's estimated useful life was 5 years,and its residual value was $2,000.Straight-line depreciation was used.
-How much gain or loss is reported if the asset is sold for $4,500 at the end of the fourth year?

• A) $1,500 gain
• B) $500 gain
• C) No gain or loss
• D) $1,500 loss

---

Definitions:

Error Probability

The likelihood of making an incorrect decision or inference in a statistical test.

Type I Error

The mistake of rejecting a true null hypothesis, also known as a "false positive" in hypothesis testing.

Denoted

Denoted refers to the act of symbolically representing something - for example, variables in mathematical equations or formulas are often denoted by letters or symbols.

Null Hypothesis

A statement or hypothesis set for statistical testing, suggesting no significant effect or relationship between variables.