When a Company Sells Equipment for Cash on a Date

question 70

Multiple Choice

When a company sells equipment for cash on a date other than the last day of the accounting period,it must record:

• A)depreciation expense for the entire accounting period during which the equipment is sold.
• B)the disposal by reducing equipment and increasing revenue; a gain or loss is reported if the decrease and increase are not equal.
• C)the disposal by decreasing both equipment and accumulated depreciation while increasing cash; a gain is reported if total assets increase.
• D)accumulated depreciation for the entire current accounting period.

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Definitions:

Closed-System Control

An approach to management or control that is self-contained and does not interact with external environments, focusing on internal functioning.

Diagonal Communication

Information exchange that occurs between individuals at different levels and different departments within an organization, bypassing traditional hierarchical structures.

Vertical Control

A management approach where decision-making and directives flow from the top levels of the organizational hierarchy down to the lower levels.

Lateral Command

A form of organizational communication that occurs among colleagues at the same hierarchical level, without involving higher management.