A Gain Is Recognized on the Disposal of Plant Assets

question 190

Multiple Choice

A gain is recognized on the disposal of plant assets when:

• A) The sales price is greater than the book value and less than the residual value.
• B) The sales price is greater than the book value and greater than the residual value.
• C) The sales price is less than both the book value and the residual value.
• D) The sales price is greater than the residual value but less than the book value.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the point where supply equals demand in a market.

Roses

Flowers known for their beauty and aromatic qualities, often symbolizing love and affection in many cultures.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total welfare gains from trade.