If an Asset Is Disposed of When It Is Fully

question 10

True/False

If an asset is disposed of when it is fully depreciated and has no residual value,the business does not need to make a journal entry because the book value is zero.

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Definitions:

Journal Entries

The recordation of financial transactions in an accounting system.

After-tax Earnings

The net income a company generates after all taxes have been deducted from gross earnings.

Physical Reductions

Decreases in the quantity or physical state of assets, often associated with inventory or fixed assets through use, wear, and tear.

FIFO Costing

FIFO Costing, or First-In, First-Out costing, is an inventory valuation method where goods first purchased or produced are the first ones sold.