It should not surprise you by now but gain or loss are terms that do not mean what they seem to mean. Gain means that the sale price is above book, while loss i below. The best outcome is when we have a book loss and market gain. If we have a truck that we paid 30,000 for and used 5 year straight-line depreciation for three years. The book valuie is 30000-(3*6000) or 12,000. If the Kwlly Blue book is 5,000 and we manage to sell the truck for 7,500 we actually have a benefit of 2,500 over market value, and a 4,500 book loss which we will use on our taxes. In other words a book loss in this case is good!
When are gains considered bad in accounting?
Gains i accounting occur when the sale price of an... View the full answer