Which of the following is correct when land costing $20,000 is sold for $29,000? The land was a component of plant and equipment on the balance sheet.
A)Revenues are debited for $29,000.
B)Cost of goods sold is credited for $20,000.
C)Gain on sale of land is credited for $9,000.
D)Operating income increases $29,000.

Question

Quizplus · Accepted Answer

When an asset is sold for more than it cost, a gain on the sale is reported. This is done by crediting the gain on sale of land account for the amount the sales price exceeded cost.

Which of the Following Is Correct When Land Costing $20,000