Asked by Klaudia Kuzia on May 04, 2024
Verified
A gain on disposal of an asset is listed as:
A) a liability on the balance sheet.
B) an asset on the balance sheet.
C) other expense on the income statement.
D) other income on the income statement.
Accumulated Depreciation
The total depreciation of an asset over its useful life, subtracted from its original cost to calculate its net book value.
Disposal
The action of getting rid of an asset through sale, trade, abandonment, or another method.
Asset
A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.
- Understand how to record the gain or loss on disposal of an asset in financial statements.
Verified Answer
CP
CEREN POLATMay 08, 2024
Final Answer :
D
Explanation :
Gains on the disposal of an asset are recorded as other income on the income statement, reflecting the positive difference between the sale price and the book value of the asset sold.
Learning Objectives
- Understand how to record the gain or loss on disposal of an asset in financial statements.