Profit on the Sale of an Asset Is Calculated

question 45

Multiple Choice

Profit on the sale of an asset is calculated

• A) By subtracting the disposal proceeds from the current carrying amount of the asset.
• B) After assessing the fair value of the asset and subtracting the proceeds on the sale.
• C) Once depreciation has been applied to the date of sale.
• D) By subtracting the updated carrying amount from the net proceeds on disposal.
• E) None of the given answers.

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Definitions:

Distribution Costs

Expenses associated with transporting, warehousing, and delivering products from the manufacturer to the consumer.

Production Costs

The total expense incurred in the manufacture of a product or delivery of a service, including raw materials, labor, and overhead costs.

Inventory Management

The practice of ordering, storing, tracking, and controlling inventory to ensure the right quantity and types of products are available when needed.

Customer Service

The support and assistance provided by a company to those people who buy or use its products or services.