When property, plant, and equipment is sold:

Question

Quizplus · Accepted Answer

Depreciation should be recorded through the date of sale. This ensures that the carrying amount of the asset on the balance sheet is up to date and reflects the asset's current value. A and B are incorrect because regardless of whether or not depreciation was taken on the asset, a gain or loss should be recognized upon its sale. Choice D is incorrect because the carrying amount of the asset should be credited to the accumulated depreciation account, not the asset account.

When Property, Plant, and Equipment Is Sold