Asked by Steven Camarena on May 11, 2024
Verified
A loss on the sale of an asset would occur when:
A) the cash received is less than the book value of the asset.
B) the cash received is equal to the book value of the asset.
C) the cash received is greater than the book value of the asset.
D) None of the above answers are correct.
Book Value
The net value of a company's assets found on its balance sheet, calculated as total assets minus intangible assets and liabilities.
Sale
A sale involves the transaction of goods or services from seller to buyer in exchange for money or other compensation.
Asset
An asset held or managed by a person, business, or nation, anticipated to yield future advantages.
- Become proficient in the process of registering the gain or loss on asset disposal within financial statements.
Verified Answer
XP
Xenia PitalugaMay 12, 2024
Final Answer :
A
Explanation :
A loss on the sale of an asset occurs when the cash received from the sale is less than the book value of the asset, meaning the asset is sold for less than its recorded value on the books.
Learning Objectives
- Become proficient in the process of registering the gain or loss on asset disposal within financial statements.