Final answer:
A fully depreciated plant asset is removed from the accounting records even though it is still being used by the business. This simplifies the accounting process and provides a more accurate representation of the business's financial position.
Step-by-step explanation:
In accounting, when a plant asset is fully depreciated, it means that the asset has been depreciated over its useful life and its value has been reduced to zero. However, even though the asset is still being used by the business, it is removed from the accounting records because its carrying value is considered to be negligible or insignificant.
By removing the fully depreciated plant asset from the accounting records, the business avoids reporting an asset with no value on its balance sheet. This simplifies the accounting process and provides a more accurate representation of the business's financial position.
For example, if a delivery truck that has been fully depreciated is still in use by a company, it would be removed from the accounting records. The company would no longer report the truck as an asset on its balance sheet, even though it is still being used in the company's operations.