When an Asset Is Exchanged for a Similar Asset and a Gain

question 23

Multiple Choice

When an asset is exchanged for a similar asset and a gain results, under accounting rules the gain is:

• A) credited to Gain on Exchange of an Asset.
• B) recorded in the other income section of the income statement.
• C) absorbed into the cost of the new asset.
• D) subtracted from the cost of the new asset.

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