The Gain or Loss on the Sale of a Plant

question 124

Multiple Choice

The gain or loss on the sale of a plant asset is determined by comparing:

• A)sale value and book value.
• B)sale value and residual value.
• C)sale value and original cost.
• D)book value and residual value.

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Definitions:

Accruals

Accounting adjustments for revenues that have been earned but not yet recorded, and expenses that have been incurred but not yet recorded.

Explicit Interest

The interest rate stated in a contract or agreement, not including any compounding interest or hidden fees.

Capital

Financial assets or the value of financial assets used for the creation of goods or services or for investing.

Pledging

The act of providing an asset as security or collateral for a loan, ensuring the lender can claim the asset if the loan is not repaid.