Asked by Trevia Knight on Apr 25, 2024
Verified
A gain on the sale of an asset occurs when:
A) the cash received is less than the book value of the asset.
B) the book value is equal to the cost of the asset, and the cash received is less than the cost of the asset.
C) the cash received is greater than the book value of the asset.
D) the accumulated depreciation is less than the asset cost.
Book Value
The net value of an asset as recorded on the balance sheet, calculated by subtracting depreciation or amortization from its original cost.
Sale
A transaction between a buyer and a seller in which money is exchanged for goods or services.
Asset
Resources owned or controlled by a business or individual that are expected to bring future benefits.
- Master the technique of noting down the gain or loss incurred from asset disposal in financial statements.
Verified Answer
BV
Bhawna Verma6 days ago
Final Answer :
C
Explanation :
A gain on the sale of an asset occurs when the cash received from the sale exceeds the book value of the asset at the time of the sale. The book value is calculated as the original cost of the asset minus any accumulated depreciation.
Learning Objectives
- Master the technique of noting down the gain or loss incurred from asset disposal in financial statements.