A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1.Assume that the truck was disposed of for $4,000 cash.The entry to record this event would include
A)a debit to Cash.
B)a debit to Accumulated Depreciation.
C)a debit to Loss on Sale of Truck.
D)all of these choices.

Question

Quizplus · Accepted Answer

- A debit to Cash is needed since the truck was disposed of for $4,000 cash. 
- A debit to Accumulated Depreciation is needed to remove the accumulated depreciation from the books, since it is a contra asset account and has a credit balance. 
- A debit to Loss on Sale of Truck is needed to record the loss on the sale, which is calculated as the difference between the cost of the asset and its net book value (cost - accumulated depreciation), minus the amount received from the sale. Therefore, all three choices are necessary to properly record the disposal of the truck.

A Truck That Cost $24,000 and on Which $18,000 of Accumulated