/ Question 1 2 pts Which of the following statements is not true regarding the d

Question

/ Question 1 2 pts Which of the following statements is not true regarding the derecognition of assets? The asset account should be credited for the historical cost of the asset and the related accumulated depreciation should be debited for its current balance The asset account should be credited for the current book value of the asset e Before any gain or loss is recognized, depreciation expense related to the asset should be brought up to date as of the date of derecognition. A loss on derecognition will occur when the amount of cash proceeds (if any) is less than the current book value of the asset

Explanation / Answer

Ans:

In the above question option 2 is not true.

Derecognition is nothing but disposal of an asset. The net proceeds on derecognition of an asset is not considered as a revenue, only the loss or gain is recognised. Incase of derecognition of asset the asset account is credited with it's historical cost, not with current book value.

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