When a company sells equipment for cash on a date other than the last day of the accounting period,it must record:
A)depreciation expense for the entire accounting period during which the equipment is sold.
B)the disposal by reducing equipment and increasing revenue; a gain or loss is reported if the decrease and increase are not equal.
C)the disposal by decreasing both equipment and accumulated depreciation while increasing cash; a gain is reported if total assets increase.
D)accumulated depreciation for the entire current accounting period.

Question

Quizplus · Accepted Answer

When equipment is sold, the company decreases the equipment account and accumulated depreciation, increases cash, and records a gain if the cash received exceeds the book value of the equipment.

When a Company Sells Equipment for Cash on a Date