19-4 Practice Test

What is recorded on plant asset records for plant assets that have been disposed of?

• Disposal date, disposal method, and disposal amount

• Original cost, accumulated depreciation, and sale price

• Purchase date, purchase method, and purchase amount

• Depreciation expense, gain on plant assets, and loss on plant assets

When an asset is disposed of after the beginning of the fiscal year, what entry may need to be recorded before an entry is made for the discarding of a plant asset?

• Partial year’s depreciation

• Depreciation expense

• Full year’s depreciation

• Accumulated depreciation

What is the formula to calculate the gain or loss on the sale of a plant asset?

• Accumulated depreciation less the cash received

• Cash received less the than book value of the asset sold

• Cash received plus book value of the asset sold

• Original cost plus accumulated depreciation

In which account classification is Loss on Plant Assets listed?

• Other Expenses

• Accumulated Depreciation

• Other Revenue

• Depreciation Expense

What entry is recorded to remove the asset and its accumulated depreciation, record the gain, and record cash when a plant asset is sold for more than book value?

• Debit Gain on Plant Assets, credit Cash

• Debit Cash, credit Gain on Plant Assets

• Debit Loss on Plant Assets, credit Cash

• Debit Cash, credit Loss on Plant Assets

What entry is recorded to remove the asset and its accumulated depreciation, record the loss, and record cash when a plant asset is sold for less than book value?

• Debit Cash, credit Loss on Plant Assets

• Debit Cash, credit Gain on Plant Assets

• Debit Loss on Plant Assets, debit Cash

• Debit Gain on Plant Assets, credit Cash

What is the purpose of recording a partial year’s depreciation on a plant asset to be sold?

• To decrease the accumulated depreciation

• To calculate the original cost of the asset

• To update the plant asset record

• To increase the book value of the asset

What is the effect on equity when a plant asset is sold for more than book value?

• Increase in equity

• No effect on equity

• Decrease in equity

• Cannot be determined

What is the effect on equity when a plant asset is sold for less than book value?

• Decrease in equity

• No effect on equity

• Increase in equity

• Cannot be determined