If a long-lived asset is retired before it is fully depreciated, and no residual or scrap value is received,
A) a gain on disposal will be recorded.
B) phantom depreciation must 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.

Question

Quizplus · Accepted Answer

When a long-lived asset is retired before it is fully depreciated and no residual or scrap value is received, the remaining undepreciated amount is recorded as a loss on disposal. This is because the asset's book value (cost minus accumulated depreciation) is not recovered.

If a Long-Lived Asset Is Retired Before It Is Fully