When an Asset Is Sold at a Gain or Loss

question 97

True/False

When an asset is sold at a gain or loss, the book value of the asset is reported as a sale in the investing section of the statement of cash flows.

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Definitions:

Warranty Liability

The legal obligation of a seller to ensure that the goods or services sold meet certain expressed or implied standards of quality and reliability.

Secondarily Liable

Liability that is not primary but comes into effect when the party with primary liability has failed to fulfill an obligation.

Indorsers

Individuals who endorse or sign their name on the back of a document or cheque, thus transferring responsibility or ownership to another party.

Drawers

In banking and finance, individuals or entities that write and issue a check or draft instructing a bank to pay a specific amount from the drawer's account.