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

Question

Quizplus · Accepted Answer

If the proceeds from the disposal of an asset are greater than its carrying value, the company recognizes a gain. This gain is calculated as the difference between the proceeds and the carrying value of the asset. No adjustment to the accumulated amortization account or the carrying value of the asset is necessary.

Upon the Disposal of an Asset, If the Proceeds Are