When a Plant Asset Is Disposed Of,the Business Must ________

question 3

Multiple Choice

When a plant asset is disposed of,the business must ________.

• A) immediately replace it
• B) ensure that the plant asset is obsolete or worn out
• C) comply with the conservatism principle and record losses but not gains
• D) bring the depreciation up to date

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Definitions:

Merger Clause

A provision in a contract stating that the written agreement supersedes all prior or oral agreements, focusing on the primacy of the current document.

Parol Evidence Rule

A legal principle that prevents parties in a written contract dispute from introducing oral or extrinsic evidence to modify the original agreement.

Parol Evidence Rule

A rule in contract law that prevents parties from presenting evidence of prior or contemporaneous agreements that would contradict the terms of a written contract.

Ambiguous Terms

Words or phrases in a contract or agreement that are unclear and open to more than one interpretation.