If Machinery That Cost $8,000 When New, Has Accumulated Depreciation

question 36

True/False

If machinery that cost $8,000 when new, has accumulated depreciation of $4,500, and is sold for $4,000, the gain recognized on the sale would be $4,000.

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Definitions:

Contract

A legally binding agreement between two or more parties that outlines rights and duties towards one another.

Voidable

A legal term describing a transaction or agreement that may be annulled or voided at the discretion of one party.

Good Faith Purchaser

A purchaser who buys without notice of any circumstance that would put a person of ordinary prudence on inquiry as to whether the seller has valid title to the goods being sold.

Title

Legal documentation that provides evidence of a person's ownership rights over property or assets.