When Shares of Stock Held as an Investment Are Sold

question 65

Multiple Choice

When shares of stock held as an investment are sold, the difference between the proceeds and the carrying amount of the investment is recorded as a(n)

• A) prior period adjustment
• B) operating income and losses
• C) paid-in capital addition
• D) gain or loss

---

Definitions:

Recoverable Amount

The higher value between an asset's fair value minus costs to sell and its value in use, used in assessing whether an asset is impaired.

Carrying Amount

The book value of an asset or liability on a company's balance sheet, reflecting its original cost adjusted for factors such as depreciation or amortization.

Anticipated Residual

The estimated value of an asset at the end of its useful life, taking into account depreciation and wear.