When a firm sells or abandons an asset, how is the gain or loss to be recognized on the income statement measured?
A) The difference between cash proceeds received and the carrying value of the asset.
B) The difference between cash proceeds received and the acquisition value of the asset.
C) The difference between cash proceeds received and the accumulated depreciation of the asset.
D) The difference between the book value of the asset and the carrying value of the asset.

Question

Quizplus · Accepted Answer

The gain or loss is measured as the difference between the cash proceeds received from the sale or abandonment and the carrying value (book value) of the asset on the firm's balance sheet.

When a Firm Sells or Abandons an Asset, How Is