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:

Fixed Expense

An expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Administrative Expense

Costs related to the general administration of a business, including office supplies, salaries of administrative personnel, and utilities.

Freight-Out

The cost of shipping goods to customers, which is typically recorded as a selling expense.

Production Budget

A plan that outlines the number of units to be produced within a specific period to meet anticipated sales and inventory needs.