A company sold equipment at a loss.What is the impact on the balance sheet of removing the equipment account and its related accumulated depreciation account?

Question

Quizplus · Accepted Answer

Removing the equipment account and accumulated depreciation account will result in a decrease in total assets as the equipment account represents a tangible asset and accumulated depreciation represents the decrease in value of that asset over time. The loss from the sale will have already been recognized in the income statement and will impact total equity, but removing the accounts will not directly impact total equity.

A Company Sold Equipment at a Loss