Which of the following statements is correct with respect to the sale of a depreciable asset? Multiple Choice A gain occurs when the selling price exceeds book value. A sale for a gain results in a decrease in total assets. A sale for a loss results in an increase in total assets. A loss occurs when the selling price is more than book value.
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- When market value of an asset is higher than book value, depreciation is not charged. A True B FalseThe difference between book value of the asset with the proceeds received from its sale, will resultin Select one a. Always a gain b Depreciable Cost c Cain or loss d. Always a lossFor financial accounting purposes, depreciation expense represents the decreasein an asset's fair market value. Select one: True False The total amount of depreciation taken over the life of a depreciable asset should be less if the double-declining balance depreciation method is used than if the straight-line method is used. Select one: True False
- Profit is earned on sale of asset when a. Sale price is less than Accumulated Depreciation b. Sale price is more than Accumulated Depreciation c. Sale price is more than book value d. Sale price is less than book value(Multiple Choice Question) An impairment loss is recorded when capital asset's 1. net book value is higher than the amount it could likely be sold for 2. market value is higher than its accumulated amortization 3. market value is higher than its net book value 4. net book value is higher than its accumulated amortizationOccasionally, events occur that change an asset's value after purchase. Which of the following is true regarding these changes in value? a.Increases in asset value are recognized.b.Reductions in asset value are recognized.c.Both decreases and increases are recognized.d.Neither decreases nor increases are recognized.
- The book value of an asset is equal to the: a. asset's market value less its historical cost b. book value relied on by secondary markets c. replacement cost of the asset d. asset's cost less accumulated depreciationreceivables not measured initially at their transaction price are measured initially ata. fair value plus transaction costs that are directly attributable to the acquisition of the financial assetb. fair valuec. fair value minus transaction costs that are directly attributable to the acquisition of the financial assetd. fair value less costs to sellA gain on the disposal of an asset indicates that the asset was sold for more than its fair value. True or False True False
- The sale of a depreciable asset resulting in a gain indicates that the proceeds from the sale were a. Less than current market value b. Greater than cost c. Greater than book value d. Less than book valueWhen a fixed asset is sold for less than book value, which one of the following will decrease?A loss on disposal occurs when:A a depreciable asset is sold for less than its undepreciated balance at the time of sale, and less than its purchase price B depreciable asset is sold for more than its undepreciated balance at the time of sale, but less than its purchase price C a depreciable asset is sold for more than its undepreciated balance at the time of sale, and more than its purchase price