Where an asset is measured using the cost model,any impairment loss is:
A)debited to the retained earnings account.
B)debited to the depreciation expense account.
C)credited to the asset account.
D)credited to the accumulated depreciation and impairment losses account.

Question

Quizplus · Accepted Answer

When an asset is measured using the cost model, any impairment loss is credited to the accumulated depreciation and impairment losses account. This is because the cost model assumes that the value of an asset remains unchanged from its original cost, and any impairment loss reduces the asset's carrying amount. Therefore, the credit to the accumulated depreciation and impairment losses account reflects the decrease in the asset's value.

Where an Asset Is Measured Using the Cost Model,any Impairment