A gain or loss on disposal of a plant asset is determined by comparing the
A) replacement cost of the asset with the asset's original cost.
B) book value of the asset with the asset's original cost.
C) original cost of the asset with the proceeds received from its sale.
D) book value of the asset with the proceeds received from its sale.

Question

Quizplus · Accepted Answer

The gain or loss on disposal of a plant asset is determined by comparing the book value of the asset (original cost less accumulated depreciation) with the proceeds received from its sale. Therefore, choice D is the correct answer.

A Gain or Loss on Disposal of a Plant Asset