Answer:
The correct answer is Option A.
DR Accumulated Depreciation – Equipment 48,000; DR Loss on Disposal of Plant Assets 72,000; CR Equipment 120,000
Explanation:
Obsolescence of an asset occurs when the value of an asset has reduced drastically due to radical technological innovation or there is now a better technique used in the production process that renders the old equipment worthless or less productive.
<em>Note that the proceed on the disposal is zero since the organization did not put up the asset for sale.</em>
Answer:
C. An increase in the price level reduces real money holdings, which reduces the amount of expenditures.
Explanation:
The first factor of downward sloping is an increase in real money holdings, affecting a great amount of expenditure. Another factor that contributes to the downward sloping aggregate demand curve is the net exports effect. Net exports are the difference between exports and imports. As the general price level increases, imported goods become less expensive relative to domestic goods, causing imports to increase. At the same time, domestic goods become more expensive to foreign buyers, causing exports to decrease. Increasing imports coupled with decreasing exports decrease net exports and contribute to the downward sloping aggregate demand curve.