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What is the result of an "increase in equity from peripheral or incidental transaction"?

A) Decrease in company value
B) Asset is sold for its book value
C) Asset is sold for more than its book value
D) No impact on equity value

User Dlinsin
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1 Answer

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Final answer:

An increase in equity from a peripheral or incidental transaction generally occurs when an asset is sold for more than its book value, resulting in a gain that boosts company equity.

Step-by-step explanation:

The result of an increase in equity from a peripheral or incidental transaction would typically be C) Asset is sold for more than its book value. When a company sells an asset for more than its book value, the excess amount is recognized as a gain in the financial statements, which ultimately increases the company's equity. This is because the book value of the asset is increased by the gain realized on the sale, reflecting an improvement in the net assets of the company.

User Vladimir Sotnikov
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