If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must
A)recognize a loss on the income statement under other expenses.
B)recognize a loss on the income statement under operating expenses.
C)recognize a gain on the income statement under other revenues.
D)Gains and losses are not to be recognized upon the sell of fixed assets.

Question

Quizplus · Accepted Answer

When a fixed asset is sold for less than its net book value (original cost - accumulated depreciation), it results in a loss. This loss should be recognized on the income statement under other expenses. Therefore, the correct choice is A.

If a Fixed Asset with an Original Cost of $18,000