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) recognize a gain on the income statement under revenues.

Question

Quizplus · Accepted Answer

When a fixed asset is sold for less than its original cost and accumulated depreciation, it results in a loss for the company. This loss is recognized on the income statement as an expense, under "other expenses." Therefore, choice A is the correct answer.

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