Asked by Everika Martinnez on Jun 15, 2024
Verified
Selling a depreciable asset for a gain results in an increase in both net income and assets.
Depreciable Asset
An asset that loses value over time due to use, wear and tear, or obsolescence, and whose cost can be allocated over its useful life.
Net Income
A company's remaining income after deducting all costs and taxes from its revenue.
Gain
The increase in the value of an asset or a decrease in the value of a liability, which results in an increase in the equity of a business.
- Identify the financial reporting requirements for the disposal and impairment of long-lived assets.
Verified Answer
CH
Colin HowellJun 21, 2024
Final Answer :
True
Explanation :
When selling a depreciable asset for a gain, the amount of the gain is added to net income and the proceeds from the sale are added to assets.
Learning Objectives
- Identify the financial reporting requirements for the disposal and impairment of long-lived assets.