Losses on the sale of long-term assets for cash:
A)Are the excess of the book value over the cash received.
B)Are recorded as a credit.
C)Are reported on a net-of-tax basis if material.

Question

Quizplus · Accepted Answer

Losses on the sale of long-term assets for cash are the excess of the book value over the cash received. They are recorded as a debit to the loss on disposal of the asset account and reduce the carrying amount of the disposed asset. They are not reported on a net-of-tax basis unless they are related to a discontinued operation.

Losses on the Sale of Long-Term Assets for Cash