If a plant asset is retired before it is fully depreciated and no salvage value is received
A) a gain on disposal occurs.
B) a loss on disposal occurs.
C) either a gain or a loss can occur.
D) neither a gain nor a loss occurs.

Question

Quizplus · Accepted Answer

If a plant asset is retired before it is fully depreciated and no salvage value is received, a loss on disposal occurs. This is because the book value of the asset (original cost minus accumulated depreciation) exceeds the amount received from the disposal, resulting in a loss.

If a Plant Asset Is Retired Before It Is Fully