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Gain or loss is determined by comparing the cash received and the market value of any...

Gain or loss is determined by comparing the cash received and the market value of any other asset received with the historical cost of the asset disposed of. True False

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Answer #1

Answer: FALSE

Gain or loss is determined by comparing the cash received and the market value of any other asset received with the Book Value of the asset disposed of.

Historic Value is the cost of purchasing the asset, taxes, commision and any other charges to ready the assets for the intended use. Book Value is the historic cost adjusted to depreciation every year. There will be gain when the cash received and the market value of any other asset received is more than the book value and a loss when it is less than the book value.

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