False

Explanation:

The gain from the sale of capital assets should be added to revenue to ascertain the net profit of a business. This is because the gain from the sale of a capital asset is considered as an income or a revenue for a business.

Reasons:

1. Revenue Recognition Principle: According to the revenue recognition principle, revenue should be recognized when it is earned. In the case of the sale of a capital asset, the gain is earned when the asset is sold. Therefore, it should be recognized as revenue and added to the net profit of the business.

2. Matching Principle: The matching principle states that expenses should be matched with the revenues they generate. In the case of the sale of a capital asset, the gain is generated from the sale and should be matched with the expenses incurred to acquire the asset. By adding the gain to revenue, the matching principle is followed, and the net profit reflects the true financial performance of the business.

3. Consistency: It is important to maintain consistency in financial reporting. If the gain from the sale of capital assets is not added to revenue, it would lead to inconsistency in the financial statements. This could make it difficult for stakeholders to compare the financial performance of the business over time.

4. Disclosure: Adding the gain from the sale of capital assets to revenue ensures that the financial statements provide a complete and accurate representation of the business's financial position and performance. It allows stakeholders to make informed decisions based on the financial information disclosed.

Conclusion:

In conclusion, the gain from the sale of capital assets should be added to revenue to ascertain the net profit of a business. This is in accordance with the revenue recognition principle, the matching principle, and the need for consistency and disclosure in financial reporting.

True.

The gain from the sale of capital assets is typically treated as a non-operating income and is not included in the regular revenue used to ascertain the net profit of a business. Instead, it is often recorded separately in the financial statements and then added or adjusted in the calculation of net profit.