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A Loss on Sale of an Asset Occurs When the Book

question 90

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A loss on sale of an asset occurs when the book value is greater than the cash received.


Definitions:

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenue, indicating its earnings.

Amortization of Bond

The gradual reduction of the book value of a bond payable account through regular payments over the life of the bond.

Gain on Sale

The profit realized from the sale of assets when the selling price exceeds the book value.

Noncurrent Assets

Assets not expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer; includes property, plant, and equipment.

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