When an asset is sold,a gain is calculated as the difference between
A)sale price and the depreciable cost of the asset sold.
B)sale price and the carrying value of the asset sold.
C)carrying value and the residual value of the asset sold.
D)sale price and the original cost of the asset sold.

Question

Quizplus · Accepted Answer

The gain on the sale of an asset is calculated as the difference between the sale price and the carrying value (i.e. book value) of the asset. This is because the carrying value represents the cost of the asset less any accumulated depreciation, and therefore reflects the asset's net value on the company's books at the time of sale. The sale price, on the other hand, represents the actual cash received for the asset. The difference between these two amounts is the gain or loss on the sale of the asset.

When an Asset Is Sold,a Gain Is Calculated as the Difference