Dispose of Long-Term Assets - Accounting

The video tutorial discusses the disposal of plant assets, covering three main methods: discarding, selling, and exchanging. Discarding involves scrapping the asset after its useful life, while selling involves trading it for cash. Exchanging is trading the asset for another non-cash asset. The video also mentions that discarding and selling will be covered in detail in the next video, while exchanging will be addressed in an upper-level accounting class.

What does discarding a plant asset mean?

• Donating the asset to charity

• Scrapping the asset after its useful life

• Exchanging the asset for another asset

• Selling the asset for cash

What happens to a plant asset at the end of its useful life if it is not sold or exchanged?

• It is donated

• It is discarded

• It is leased

• It is refurbished

When a plant asset is sold, what is it exchanged for?

• A service

• Cash

• A promise to pay later

• Another plant asset

What is the key difference between selling and exchanging a plant asset?

• Both involve cash

• Selling involves cash, exchanging does not

• Neither involves cash

• Exchanging involves cash, selling does not

Which method of plant asset disposal is typically covered in advanced accounting classes?

• Discarding

• Selling

• All of the above

• Exchanging