If an Asset Is Exchanged for a Similar Asset, a Gain

Multiple Choice

If an asset is exchanged for a similar asset, a gain results:

A) when the book value of the old asset is greater than what is received for the trade-in allowance.
B) when the book value of the old asset is less than what is received for the trade-in allowance.
C) when the accumulated depreciation equals the cost of the old asset.
D) None of the above answers are correct.