In a previous period Banshee Ltd wrote-off its 'dynamic mover' equipment, but new information has shown that it is probable that the future economic benefits exceed its cost of $40 000. What is the appropriate accounting entry?
E) None of the given answers.

Question

Quizplus · Accepted Answer

The appropriate accounting entry is to reverse the previous write-off and re-recognize the asset. Therefore, the correct choice is B, which shows the reversal of the previous write-off and the recognition of the asset at its original cost of $40,000.

In a Previous Period Banshee Ltd Wrote-Off Its 'Dynamic Mover