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Question

A company disposes of equipment that it no longer uses in its business. The amount received by the company is more than the amount the asset is carried at in the accounting records. The company will report a(n)


A

Expense

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B

Gain

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C

Loss

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D

Revenue

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Solution

The correct option is B

Gain


Other Income. Because the sale of equipment is outside of the main business activity and the amount received was greater than the amount at which the asset was carried in the company books, it is reported as Other Income.


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