Gains generated from the sale of long-term assets for cash: B. Are the excess of the cash received over the book value.
In Economics, gain is also referred to as profit and it can be defined as a measure of the amount of money that is generated when the selling price is deducted from the cost price of a good or service, which is usually provided by producers.
This ultimately implies that, an economic gain or profit is equal to the total revenue minus total cost. Thus, it typically involves subtracting the total cost of a product from the total revenue that a business firm (economic entity) receives through it sales.
In this context, we can infer and logically deduce that gains generated from the sale of long-term assets for cash refers to the excess of the cash received over the book value.
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Complete Question:
Gains on the sale of long-term assets for cash:
A. Are reported on a net-of-tax basis if material.
B. Are the excess of the cash received over the book value.
C. Are recorded as a debit.
D. Are the excess of the book value over the cash received.
