Sale of Plant Assets definitions Flashcards
Sale of Plant Assets definitions
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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.
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