The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale were
A) less than current market value.
B) greater than cost.
C) greater than book value.
D) less than book value.

Question

Quizplus · Accepted Answer

A loss on the sale of a depreciable asset means that the proceeds from the sale were less than the book value of the asset, which is the value of the asset as recorded on the company's accounting records. Book value is calculated by taking the cost of the asset and subtracting accumulated depreciation. Therefore, if the sale proceeds are less than the book value, it indicates that the asset was sold for less than its recorded value on the company's books.

The Sale of a Depreciable Asset Resulting in a Loss