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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Definitions:

Multicolumn Form

A formatting style used in accounting and bookkeeping that uses multiple columns to represent and organize financial information and transactions.

Unemployment Compensation Tax

A tax paid by employers to fund unemployment benefits for workers who have lost their jobs.

Employer's Liability

Refers to the employer's obligation to compensate employees for injuries and illnesses that occur due to their job.

Employee

An individual who is hired to work for a company or organization in exchange for compensation, typically under an employment agreement.