Skip to main content
Pearson+ LogoPearson+ Logo

Sale of Plant Assets definitions Flashcards

Sale of Plant Assets definitions
Control buttons has been changed to "navigation" mode.
1/15
  • Fixed Asset
    Long-term tangible resource used in operations, not intended for resale, such as equipment or machinery.
  • Net Book Value
    Amount calculated by subtracting accumulated depreciation from the original cost of an asset.
  • Accumulated Depreciation
    Total depreciation expense recorded against an asset since its acquisition.
  • Proceeds
    Cash received from the sale of a plant asset, used to determine gain or loss.
  • Gain
    Positive difference when sale proceeds exceed net book value, increasing net income as a credit.
  • Loss
    Negative difference when sale proceeds are less than net book value, decreasing net income as a debit.
  • Income Statement
    Financial report where gains and losses from asset sales are shown under other income.
  • Other Income
    Section of the income statement including items like gains, losses, and interest expense.
  • Equipment Account
    Ledger tracking the cost of equipment owned, increased by purchases and decreased by sales.
  • Depreciation Expense
    Periodic allocation of an asset’s cost over its useful life, increasing accumulated depreciation.
  • Contra Asset
    Account type, such as accumulated depreciation, that offsets a related asset account.
  • Credit
    Accounting entry increasing liabilities, equity, or revenue accounts, and decreasing assets or expenses.
  • Debit
    Accounting entry increasing assets or expenses, and decreasing liabilities, equity, or revenue accounts.
  • Ending Balance
    Final amount in an account after all increases and decreases for a period are considered.
  • Cash
    Asset account reflecting currency and equivalents, increased by proceeds from asset sales.