multiple select question\nselect all that apply\na retirement or abandonment of an asset is different from a…

multiple select question\nselect all that apply\na retirement or abandonment of an asset is different from a sale of an asset because\n□ a loss must be recognized for the remaining book value.\n□ a gain is recognized for the undepreciated portion of the equipment.\n□ the residual value is included as a gain.\n□ no cash is received.

multiple select question\nselect all that apply\na retirement or abandonment of an asset is different from a sale of an asset because\n□ a loss must be recognized for the remaining book value.\n□ a gain is recognized for the undepreciated portion of the equipment.\n□ the residual value is included as a gain.\n□ no cash is received.

Answer

Brief Explanations:

When an asset is retired or abandoned, no cash is received as there is no external party purchasing it. Also, a loss must be recognized for the remaining book - value since the asset is taken out of service without a cash inflow to offset its remaining value on the books. In a sale, cash is received and gains or losses are calculated based on the difference between the selling price and the book value. There is no gain recognized for the undepreciated portion or including residual value as a gain in the case of retirement/abandonment in the way described in the other incorrect options.

Answer:

A. a loss must be recognized for the remaining book value D. no cash is received