Asked by Grace Devine on May 08, 2024
Verified
If an asset is fully depreciated and retired for proceeds equal to its residual value
A) a gain on disposal will be recorded.
B) depreciation must continue to be taken as though the asset were still on the books.
C) a loss on disposal will be recorded.
D) no gain or loss on disposal will be recorded.
Fully Depreciated
A condition where a fixed asset has reached the end of its useful life and its book value is reduced to salvage value or zero.
No Gain
A financial situation where a transaction does not result in any profit to the party involved.
- Comprehend and account for increases or decreases in financial standing due to asset disposal.
Verified Answer
AM
Arrielle Mary Faith NengascaMay 09, 2024
Final Answer :
D
Explanation :
When an asset is fully depreciated and retired for proceeds equal to its residual value, it means the asset's book value equals its residual value. Selling it for the residual value means there's no difference between the sale price and the book value, resulting in no gain or loss on disposal.
Learning Objectives
- Comprehend and account for increases or decreases in financial standing due to asset disposal.