For financial reporting purposes,the gain or loss on the sale of a plant asset is determined by comparing the asset's:
A)Cost with its book value.
B)Sales price with its book value.
C)Tax basis with its book value.
D)Sales price with its tax basis.

Question

Quizplus · Accepted Answer

When calculating gain or loss on the sale of a plant asset, the sales price needs to be compared with the book value of the asset. Book value is the original cost of the asset minus any accumulated depreciation. If the sales price is higher than the book value, it results in a gain, and if the sales price is lower than the book value, it results in a loss. The tax basis (the value of the asset for tax purposes) is not used in determining gain or loss for financial reporting purposes.

For Financial Reporting Purposes,the Gain or Loss on the Sale