Martinez Owns Machinery That Cost $87,000 with Accumulated Depreciation of $40,000.The

question 149

Multiple Choice

Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000.The company sells the machinery for cash of $42,000.The journal entry to record the sale would include:

• A)A credit to Accumulated Depreciation of $40,000.
• B)A credit to Gain on Sale of $2,000.
• C)A credit to Machinery of $47,000.
• D)A debit to Cash of $42,000.
• E)A debit to Accumulated Depreciation of $47,000.

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Definitions:

Drawee

In financial terms, this is the entity upon which a cheque or draft is drawn and is responsible for paying the amount.

Financial Statement

A summarized record that shows the financial health of a business or individual, including components like balance sheets, income statements, and cash flow statements.

Normal Balance

The side (debit or credit) of an account that is typically increased, indicating whether an account increases on the left side (debit) or right side (credit).

Permanent/Temporary

Categories of accounts in accounting, where permanent accounts carry their end-of-period balances into the next period, and temporary accounts are closed.