If the sales price of a plant asset is lower than the book value,there will be a loss on sale.

Question

Quizplus · Accepted Answer

If the sales price is lower than the book value, it means that the asset is being sold for less than what it is worth according to the company's accounting records. This creates a loss on sale, which is calculated as the difference between the book value and the sales price. The loss is recorded on the income statement as an expense, which reduces the company's net income for the period.

If the Sales Price of a Plant Asset Is Lower