The Journal Entry to Record the Increase in the Value

question 52

Multiple Choice

The journal entry to record the increase in the value of a long-lived asset would include which of the following?

• A)A credit to Gain on Asset Value Increase.
• B)A debit to the long-lived asset account.
• C)A credit to Non-Impairment of Asset.
• D)No entry would be made according to GAAP.

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Definitions:

Deductible

An expense that can be subtracted from gross income to reduce the amount of income subject to tax, often related to business expenses, healthcare costs, and certain individual deductions.

Itemized Deduction

Deductions from income that taxpayers can claim for specific expenses, as opposed to taking a standard deduction.

Home Equity Indebtedness

Debt secured by a qualified residence that exceeds the acquisition indebtedness, with interest on such debt often being deductible under U.S. tax law.

Acquisition Indebtedness

Debt incurred in acquiring, constructing, or substantially improving a qualified residence of the taxpayer, and secured by the residence.