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When an asset is sold, a gain occurs when the:______.

a. sale price exceeds the book value of the asset sold.
b. sale price exceeds the original cost of the asset sold.
c. book value exceeds the sale price of the asset sold.
d. sale price exceeds the depreciable cost of the asset sold.

1 Answer

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Answer:

a. sale price exceeds the book value of the asset sold.

Step-by-step explanation:

The gain recognized when the sale price is exceeded than the book value i.e

Gain recognized = Sale price - book value

where

Sale price is the selling price of the asset

And, the book value is the carrying value of the asset

Book value = Acquired value of an asset - accumulated depreciation

Hence, the option a is correct

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