Final answer:
The sale of a long-lived asset for less than its carrying amount results in a decrease in profit, as the loss from the sale reduces the company's net income.
Step-by-step explanation:
If a long-lived asset is sold and the carrying amount is higher than the proceeds received, the correct answer is:
- b. profit will be decreased.
When the carrying amount of an asset is more than the amount received from its sale, the difference is recorded as a loss in the company's financial statements. This loss will reduce the net income, and consequently, lower the overall profit of the company. It is important to note that the option regarding the current ratio is unrelated to the situation as this ratio measures liquidity and not profitability. The loss will decrease the company's profit because the asset was sold for less than its carrying amount, leading to a lower net income.