If a plant asset is retired before it is fully depreciated and the salvage value received is less than the asset's book value

A) a gain on disposal occurs.
B) a loss on disposal occurs.
C) there is no gain or loss on disposal.
D) additional depreciation expense must be recorded.

Salvage Value

The estimated sell-back value of an asset once it surpasses its life of effectiveness.

Book Value

The net value of a company's assets minus its liabilities, representing the shareholders' equity on a per share basis.

Loss on Disposal

The financial loss incurred when the selling price of an asset is less than its carrying amount at the time of disposal.