If an asset is being sold or exchanged, the gain or loss is always computed by comparing the:

Question

Quizplus · Accepted Answer

The gain or loss on the sale or exchange of an asset is computed by comparing the asset's market value (or selling price) with its book value. The book value is the asset's original cost minus any accumulated depreciation. This comparison determines whether the company made a profit (gain) or suffered a loss on the sale of the asset.

If an Asset Is Being Sold or Exchanged, the Gain