A Gain Is Recognized on the Disposal of Plant Assets

question 90

Multiple Choice

A gain is recognized on the disposal of plant assets when:

• A)The sales price is greater than the residual value but less than the book value.
• B)The sales price is less than both the book value and the residual value.
• C)The sales price is greater than the book value and greater than the residual value.
• D)The sales price is greater than the book value and less than the residual value.

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Definitions:

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer than a year.

Interest Expense

The expenditure associated with acquiring funds on loan across a designated duration.

Interest Income

Earnings received from investments in various forms of debt, such as savings accounts, certificates of deposit, and bonds.