A net decrease in the Equipment account indicates that equipment must have been sold at a loss during the year.

Question

Quizplus · Accepted Answer

A net decrease in the Equipment account simply means that the company had less equipment at the end of the year compared to the beginning. It does not necessarily indicate whether or not the equipment was sold at a loss. It could have been sold at a profit, donated, or simply retired due to obsolescence or other reasons.

A Net Decrease in the Equipment Account Indicates That Equipment