When a company sells a long-lived asset,stockholders' equity will change by the:
A)amount of the sale.
B)amount of the asset's book value.
C)amount of the asset's accumulated depreciation.
D)difference between the sales price and the asset's book value.

Question

Quizplus · Accepted Answer

When a company sells a long-lived asset, the stockholders' equity will change by the difference between the sales price and the asset's book value. This is because the sale of the asset will result in a gain or loss, which will affect the company's net income and therefore stockholders' equity. The amount of the sale, the asset's book value, and its accumulated depreciation are all important factors in determining the gain or loss on the sale, but they do not impact stockholders' equity directly.

When a Company Sells a Long-Lived Asset,stockholders' Equity Will Change