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Profit on sale of investment

Answer:
is transfered to goodwill
Is transferred to capital reserve account
if the investment long term investment
O Is transferred to profit and loss A/C
Is transferred to profit and loss A/c only
O
if the investment is current investment​

User Goredwards
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6.3k points

1 Answer

7 votes

Answer:

B: Is transferred to capital reserve account if the investment long term investment

D: Is transferred to profit and loss A/c only if the investment is current investment

Explanation:

Fixed assets are long term investments and when these assets are sold at a profit, the profit on the sale of such investment is usually transferred to Capital Reserve Account.

Meanwhile, current assets are current investments and when these assets are sold at a profit, the profit on the sale of such investment is usually transferred to profit and loss account.

Thus, options B & D are correct.

User M Somerville
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6.0k points