If disposal of an asset occurs during the year, depreciation is
A)not recorded for the year.
B)recorded for the whole year.
C)recorded for the fraction of the year to the date of the disposal.
D)not recorded if the asset is scrapped.

Question

Quizplus · Accepted Answer

Depreciation is only recorded for the fraction of the year up to the date of disposal. This is because the asset is no longer being used or contributing to earning revenue for the remaining portion of the year. Option A is incorrect because depreciation needs to be recorded up until the date of disposal. Option B is incorrect because the asset was not used for the entire year. Option D is incorrect because scrapping the asset does not affect whether or not depreciation is recorded for the portion of the year it was in use.

If Disposal of an Asset Occurs During the Year, Depreciation