If disposal of a plant asset occurs during the year depreciation is
A) not recorded for the year.
B) recorded for the whole year.
C) recorded for the fraction of the year to the date of the disposal.
D) not recorded if the asset is scrapped.

Question

Quizplus · Accepted Answer

Depreciation is recorded based on the fraction of the year to the date of disposal when a plant asset is disposed of during the year. This is known as partial-year depreciation. Only the period of time when the asset was in use and available for generating revenue is depreciated. If the asset is scrapped, no disposal value is received and the amount received should be debited to cash and credited to the asset account.

If Disposal of a Plant Asset Occurs During the Year