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A gain or loss on disposal of a fixed as is determined by comparing the Group...

A gain or loss on disposal of a fixed as is determined by comparing the

Group of answer choices

fair market value of the asset with the asset’s original cost

the book value of the asset with the cash received from the sale

historical cost of the asset with the cash received from the sale

accumulated depreciation of the asset with the cash received from the sale

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Answer #1

A gain or loss on disposal of fixed asset as is determined by comparing the book value of the asset with the cash recieved from sale as book value represents the carrying amount of asset and to calculate true gain and loss on sale of fixed asset without misleading users of financial statements this is the way.

Fair market value and original cost can't be compared as sale price is needed to calculate gain or loss on sale of asset.

historical cost does not represent carrying value of the asset as there are chances of impairment of asset and asset is revalued This historical cost cannot be compared with sale price as it does not represent current value of asset.

Accumulated depreciation is not the value of the assset and therefore cant be compared to calculate gain or loss on sale of asset.

HOPE THIS HELPS :)

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