Which of the Following Is True Regarding Asset Abandonment

question 160

Multiple Choice

Which of the following is true regarding asset abandonment?

• A)Firms will sometimes abandon assets if there is no market for the asset.
• B)The firm eliminates the carrying value of the asset and recognizes a loss in an amount equal to the carrying value.
• C)Firms will sometimes abandon assets if an automobile is severely damaged in an accident.
• D)Firms will sometimes abandon assets if a machine requires an overhaul that is not cost effective.
• E)all of the above

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Definitions:

Sales Variance Analysis

A financial process used to compare the actual sales against forecasted sales to understand variances and their causes.

Planning

The process of setting objectives, determining strategies to achieve them, and coordinating resources to execute the strategies.

Price Variance

The difference between the actual cost of a good or service and its budgeted or standard cost.

Standard Price

The pre-determined cost that a company expects to pay for goods and services.