The Gain on the Disposal of Equipment Is Recognized When

question 49

Multiple Choice

The gain on the disposal of equipment is recognized when:

• A)The book value of the equipment is greater than the value received.
• B)The book value of the equipment is less than the value received.
• C)A salvage value exists.
• D)A gain should not be recognized on the disposal of an asset.

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Definitions:

Multiproduct CVP Analysis

A method used in managerial accounting to analyze the profitability of products by examining the relationship between cost, volume, and price across multiple products.

Constant Sales Mix

An assumption in cost-volume-profit analysis that the sales mix will remain unchanged as sales levels vary.

Assumption

A basic premise or belief that is accepted as true without proof as the basis for argument or inference.

Multiproduct Company

A business entity that manufactures or sells more than one type of product, often across different product lines or industries.