Upon the disposal of an asset,if the proceeds are greater than the carrying value of the asset,the company must
A)recognize a loss.
B)recognize a gain.
C)adjust the accumulated depreciation account so the carrying value equals the proceeds.
D)adjust the carrying value to market value.

Question

Quizplus · Accepted Answer

If the proceeds from the disposal of an asset are greater than the carrying value, the company must recognize a gain. This gain is recorded on the income statement and represents the difference between the proceeds and the carrying value of the asset. No adjustment is made to the accumulated depreciation account or the carrying value of the asset.

Upon the Disposal of an Asset,if the Proceeds Are Greater