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) adjust the carrying value to market value
C) recognize a gain
D) adjust the accumulated depreciation account so the carrying value equals the proceeds

Question

Quizplus · Accepted Answer

When the proceeds from the disposal of an asset exceed its carrying value, the company recognizes a gain, as this indicates the company sold the asset for more than its recorded net book value.

Upon the Disposal of an Asset, If the Proceeds Are