Regarding a firm that abandons an asset,
A)there is usually no market for the asset.
B)the book value of an abandoned asset is eliminated from the balance sheet.
C)the firm recognizes a loss in an amount equal to the book value of the abandoned asset in the period that the asset is abandoned.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

All of the above are correct. When a firm abandons an asset, it usually means that there is no market for the asset, which leads to the elimination of the book value of the asset from the balance sheet. Additionally, the firm must recognize a loss in an amount equal to the book value of the abandoned asset in the period that the asset is abandoned.

Regarding a Firm That Abandons an Asset