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 amortization.
D)difference between the sale price and the asset's book value.

Question

Quizplus · Accepted Answer

When a company sells a long-lived asset, shareholders' equity will change by the difference between the sale price and the asset's book value. This is because the company will record a gain or loss on the sale equal to this difference. The amount of the sale (A), the asset's book value (B), and the asset's accumulated amortization (C) do not directly impact shareholders' equity.

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