Which of the Following Items Is Included in the Journal

question 133

Multiple Choice

Which of the following items is included in the journal entry if a company sells equipment at a price greater than its book value?

• A) A credit to Gain on sale of equipment
• B) A debit to Loss on sale of equipment
• C) A credit to Accumulated depreciation
• D) A debit to Equipment for its book value

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is globally recognized for financial reporting.

One-transaction Approach

A fiscal approach viewing an intercompany transaction as a singular event affecting consolidated financial statements, without recognizing it in individual accounts.

Two-transaction Approach

An accounting method where a transaction is considered to involve two separate events that are recorded independently.

Two-transaction Theory

A concept in accounting that proposes a business transaction affects two or more accounts in the ledger, which is fundamental to the double-entry bookkeeping system.