Gains on the Sale of Fixed Assets for Cash

question 142

Multiple Choice

Gains on the sale of fixed assets for cash:

• A)Are the excess of the book value over the cash received.
• B)Are recorded as a debit.
• C)Are reported on a net-of-tax basis if material.
• D)Are the excess of the cash received over the book value.

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Definitions:

Settlement Amount

A financial sum agreed upon by parties in a contract, often referring to the resolution amount in disputes or the completion payment in transactions.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Income Statement

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period of time.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.