When a Firm Sells or Abandons an Asset, How Is

question 55

Multiple Choice

When a firm sells or abandons an asset, how is the gain or loss to be recognized on the income statement measured?

• A) The difference between cash proceeds received and the carrying value of the asset.
• B) The difference between cash proceeds received and the acquisition value of the asset.
• C) The difference between cash proceeds received and the accumulated depreciation of the asset.
• D) The difference between the book value of the asset and the carrying value of the asset.

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