Assume that a machine with a cost of $90 000 has accumulated depreciation of $48 000 on the date of its disposal. What is the profit or loss on disposal of the old machine if it was traded-in for $40 000 on a new machine? (Ignore GST.)

Which of the following statements about depreciation is true?

a.

The cash account is affected by depreciation charges.

b.

Accumulated depreciation is shown in the financial statements as a contra-expense account.

c.

Accumulated depreciation represents the amount of an asset's cost that has been transferred to depreciation expense to date.

d.

Depreciation represents the amount of cash available to replace assets when they wear out.