To Calculate a Gain or Loss on the Sale of an Asset

question 35

Multiple Choice

To calculate a gain or loss on the sale of an asset, the proceeds from the sale are reduced by which of the following?

• A) Tax basis of the property
• B) Selling expenses
• C) Amount realized
• D) All of the above
• E) A and B above

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Definitions:

Financial Data

Quantitative information pertaining to financial transactions, including earnings, expenditures, assets, liabilities, and equity.

Controlling Interest

Ownership interest in a business entity that gives the holder the power to direct or influence the direction of management and policies.

Consolidation Worksheet

An instrument utilized for creating combined financial reports that merges the finances of a parent entity with those of its subsidiary companies.

Goodwill Impairment

An accounting process involving the reassessment of the value of goodwill on the balance sheet and reducing it if its market value has declined below the carrying value.