A gain will result when the cash received on the sale of property,plant,and equipment exceeds the book value of the asset.

Question

Quizplus · Accepted Answer

A gain is recognized when the sales price of a fixed asset exceeds its book value. This is because the book value reflects the asset's historical cost, and therefore does not account for inflation or increases in market value over time. When the sales price is higher than the book value, the excess amount is a gain, which increases the company's net income and overall profitability.

A Gain Will Result When the Cash Received on the Sale