When an asset is sold, a gain is reported that is equal to the amount that the
A)sale price exceeds the carrying amount of the asset sold.
B)sale price exceeds the original cost of the asset sold.
C)carrying amount exceeds the sale price of the asset sold.
D)sale price exceeds the depreciable cost of the asset sold.

Question

Quizplus · Accepted Answer

The gain on the sale of an asset is calculated by subtracting the carrying amount (or book value) of the asset at the time of sale from the sale price. This is because the carrying amount represents the asset's cost, adjusted for accumulated depreciation and any impairment losses, and is the amount at which the asset is recorded on the company's books. Therefore, when the asset is sold, the gain is equal to the amount by which the sale price exceeds the carrying amount.

When an Asset Is Sold, a Gain Is Reported That