A gain on disposal is recognized when the selling price of the asset is ________ the book value.
A)greater than
B)equal to
C)less than
D)greater than or equal to

Question

Quizplus · Accepted Answer

A gain on disposal is recognized when the selling price of the asset is greater than the book value. This is because the book value represents the cost of the asset minus its accumulated depreciation, which may be lower than the market value of the asset at the time of sale. If the selling price exceeds the book value, then the company has made a profit on the sale, which is recognized as a gain on disposal.

A Gain on Disposal Is Recognized When the Selling Price