When a Company Recognises a Depreciation Credit Resulting from a Review

question 23

Multiple Choice

When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:

• A) in the opening balance of retained earnings
• B) in the depreciation expense
• C) directly in the depreciable asset account
• D) as a gain in the current period.

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Definitions:

Hypothetical Proposition

An assumption made for the sake of argument or investigation, often forming the basis of a conditional statement.

Antecedent

In grammar, the word, phrase, or clause that a pronoun or other part of a sentence refers to.

Proposition

An offered or suggested plan or idea for consideration or action.

Hypothetical Proposition

A statement or proposition that is based on hypothesis rather than fact, typically used to explore potential outcomes.