A Company Exchanges an Old Machine for a New Machine

question 121

Multiple Choice

A company exchanges an old machine for a new machine and cash is paid for the new machine.Assume there is a Gain on Exchange of Machine.In the journal entry to record the exchange by the owner of the old machine,what accounts will the accountant debit?

• A)Machine and Accumulated Depreciation
• B)Cash and Machine
• C)Accumulated Depreciation,Cash and Machine
• D)Accumulated Depreciation,Cash,Machine and Gain on Exchange of Machine

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Sequential Method

A procedure in cost accounting for allocating service department costs to producing departments in a specific order.

Direct Method

Definition: A cash flow statement preparation approach that presents major classes of gross cash receipts and payments.

Algebraic Expression

A mathematical phrase that can contain ordinary numbers, variables (like x or y), and operators (like add, subtract, multiply, and divide).

Janitorial Department

A division within a business that is responsible for maintaining the cleanliness of the premises.