To Determine If There Is a Gain or Loss on the Sale

question 50

Multiple Choice

To determine if there is a gain or loss on the sale of an asset,you must compare:

• A) sales price and book value.
• B) sales price and salvage value.
• C) sales price and original cost.
• D) book value and salvage cost.

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Definitions:

Days Payable Outstanding

A financial ratio that measures the average number of days a company takes to pay its suppliers; an indicator of how efficiently a company manages its payables.

Cash Receipts

The collection of money, including coins, currency, checks, and electronic transfers, received by a business or organization.

Default Risk

The possibility that a debtor will fail to fulfill their financial liabilities as agreed upon.

Financial Ratios

Financial ratios are quantitative measures derived from financial statement analysis to evaluate the financial performance, condition, and valuation of a company.