The gain or loss on the sale of a plant asset is determined by comparing the market value of assets received with the ________ of asset sold.

Question

Quizplus · Accepted Answer

The gain or loss on the sale of a plant asset is determined by comparing the market value of assets received with the book value of the asset sold. The book value is the original cost of the asset minus any accumulated depreciation as of the date of sale. Residual value and salvage value are both terms used to refer to the estimated value of an asset at the end of its useful life and are not used in determining gain or loss on the sale of an asset. Original cost is used to calculate depreciation but is not relevant to determining gain or loss on the sale of an asset.

The Gain or Loss on the Sale of a Plant