Asked by Molly Walsh on Jul 12, 2024
Verified
When an asset retirement obligation is established,the offsetting debit goes to a contra-liability account.
Asset Retirement Obligation
A legal obligation associated with the retirement of a tangible long-lived asset, where the entity is required to remove or dispose of the asset.
Contra-Liability Account
An account that decreases the balance of a related liability account, representing a credit balance in the liability section of the balance sheet.
- Identify the variances between concrete and abstract assets along with their accounting procedures.
Verified Answer
DB
Daphne BazileJul 16, 2024
Final Answer :
False
Explanation :
When an asset retirement obligation is established, the offsetting debit goes to an asset account, increasing the carrying amount of the related long-lived asset, not to a contra-liability account.
Learning Objectives
- Identify the variances between concrete and abstract assets along with their accounting procedures.
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