Which of the following statements is correct with respect to the sale of a depreciable asset?
A)A gain occurs when the selling price exceeds book value.
B)A sale for a gain results in a decrease in total assets.
C)A sale for a loss results in an increase in total assets.
D)A loss occurs when the selling price is more than book value.

Question

Quizplus · Accepted Answer

A gain occurs when the selling price exceeds book value, which means that the asset was sold for more than its recorded value on the books. This results in an increase in total assets, not a decrease. A sale for a loss occurs when the selling price is less than book value.

Which of the Following Statements Is Correct with Respect to the Sale