If an Asset Is Scrapped Before Being Fully Depreciated

question 208

Multiple Choice

If an asset is scrapped before being fully depreciated:

• A) the company will incur a loss on the disposal.
• B) the equipment account will be credited.
• C) the accumulated depreciation account will be debited.
• D) all of the above will occur.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and is authorized to act as a single entity.

Officer

typically refers to a person holding a position of authority within an organization, especially within the military or law enforcement, but also in corporate and governmental contexts.

Proxy Materials

Documents that are distributed to shareholders in preparation for shareholders' meetings, usually including information necessary for making informed votes on corporate matters.

Shareholders

Individuals or entities that own shares in a corporation, giving them certain rights and interests in the company.