Gains on the cash sales of fixed assets:
A)Are the excess of the book value over the cash proceeds.
B)Are part of cash flows from operations.
C)Are reported on a net-of-tax basis if material.
D)Are the excess of the cash proceeds over the book value of the assets sold.

Question

Quizplus · Accepted Answer

Gains on the cash sales of fixed assets are the excess of the cash proceeds over the book value of the assets sold. This occurs when the cash received is greater than the carrying amount of the asset being sold. As a result, it is reported on the income statement as part of "other income" and not as part of operating activities.

Gains on the Cash Sales of Fixed Assets