Equipment with an Original Cost of $75,000 and Accumulated Depreciation

question 77

Multiple Choice

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would

• A) increase by $48,000
• B) decrease by $7,000
• C) increase by $55,000
• D) decrease by $27,000

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Definitions:

Self-Serving Bias

The common human tendency to attribute one's successes to personal attributes and failures to external factors.

Financial Crisis

A situation where the value of financial institutions or assets drops rapidly, often leading to a loss of wealth and the collapse of markets.

Wall Street

Refers to the financial district of New York City, known as a major center for the world's financial markets.

Overconfidence Effect

A cognitive bias where an individual's subjective confidence in their judgements is reliably greater than their objective accuracy, especially when confidence is relatively high.