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:

Property, Plant

Assets that are used in operations and have a useful life longer than one year, such as buildings, machinery, and equipment.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired.

Cash Dividends

Payments made by a corporation to its shareholder members from current or retained earnings, usually in the form of cash.

Operating Activities

The day-to-day functions of a business related to producing and delivering its goods and services, as reflected in its cash flow.