When a company sells a long-lived asset,shareholders' 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 sale price and the asset's book value.

Question

Quizplus · Accepted Answer

When a company sells a long-lived asset, the shareholders' equity will change by the difference between the sale price and the asset's book value. This is because the asset's book value represents the total amount of value that the company had invested in the asset, including any accumulated depreciation. Therefore, when the company sells the asset for more or less than its book value, the difference will affect the shareholders' equity.

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