What happens to the disposed item’s balances on the Statement of Financial Position?

When an asset is disposed of, it is removed from the Statement of Financial Position. This is because the statement reflects the current status of assets, liabilities, and equity at a specific point in time, and once an asset is no longer owned, it ceases to exist in those financial records. Therefore, the balances related to the disposed item will no longer appear on the statement, ensuring that the financial position accurately reflects only the assets that the company currently owns.

The other options do not accurately capture the treatment of disposed items. For example, an item would not remain until the end of the financial period or be adjusted for depreciation after it's disposed of, as there’s no longer any value associated with it on the Statement of Financial Position. Additionally, transferring disposed items to a liability account doesn't align with standard accounting practices, as liabilities represent obligations rather than assets.