An asset that cost $25,000 was sold for $9,000 cash. Accumulated depreciation on the asset was $16,000. The entry to record this transaction includes the recognition of

Question

Quizplus · Accepted Answer

The asset was sold for less than its cost ($9,000 vs $25,000) but the accumulated depreciation was also taken into account ($16,000) leaving no overall gain or loss. Therefore, neither a gain nor a loss should be recorded.

An Asset That Cost $25,000 Was Sold for $9,000 Cash