Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

The gain or loss on disposal of an asset is calculated as:

Proceeds from sale minus the asset's carrying amount (book value)

Proceeds from sale plus accumulated depreciation

Original cost of the asset minus accumulated depreciation

Original cost of the asset minus proceeds from sale

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Verified step by step guidance

Understand the concept of 'gain or loss on disposal of an asset': It represents the financial result of selling an asset, calculated by comparing the proceeds from the sale to the asset's carrying amount (book value).

Identify the formula for calculating the gain or loss: Gain or Loss = Proceeds from Sale - Carrying Amount (Book Value).

Clarify the components of the formula: The 'Proceeds from Sale' refers to the amount received from selling the asset, and the 'Carrying Amount' is the asset's original cost minus accumulated depreciation.

Evaluate the incorrect options: For example, 'Proceeds from sale plus accumulated depreciation' does not align with the formula, as accumulated depreciation is already factored into the carrying amount.

Apply the correct formula to solve similar problems: Always subtract the carrying amount (original cost minus accumulated depreciation) from the proceeds of the sale to determine the gain or loss.