The generally accepted accounting principle that supports recording the value of a property at the purchase price when the market value is higher is the:
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- Asset Valuation and Income Recognition. Asset valuation and recognition of net income closely relate. Explain, including conditions when they do not.Also known as the historical cost principle, ________ states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition. A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principleThe generally accepted accounting principle that supports recording the value of a property at the purchase price when the market value is higher is the: A. conservatism principle B. going concern principle C. monetary principle D. cost principle
- The key characteristic for theclassification of an asset as ‘held for sale’ is that the carrying amount ofthe asset must _________________. a Be lower than initial cost of the asset. b Be higher than its net realizable value. c Principally be recovered through continuing use. d Principally be recovered through a sale transaction.The amount for which an asset could be exchanged, a liability settled , or an equity instrument could be exchanged between knowledgeable parties is known as _________ a. Fair value cost principle b. Historical cost principle c. Futuristic cost principle d. Replacement cost PrincipleThe possible answers for option D are:Cost of Goods SoldDepreciation ExpenseEarned RevenueIncome Tax ExpenseInsurance ExpenseInterest ExpenseSupplies ExpenseWage Expense
- Which accounting concepts requires non-current assets to be valued at cost less accumulated depreciation, rather at their enforced saleable value a. Prudence b. Relevance c. Comparability d. Going concernWhich of the following statements about capitalizing costs is correct?A. Capitalizing costs refers to the process of converting assets to expenses.B. Only the purchase price of the asset is capitalized.C. Capitalizing a cost means to record it as an asset.D. Capitalizing costs results in an immediate decrease in net income.These include both tangible assets such as (b) and intangible assets such as (c). To pay for these assets, they sell (d) assets such as (e). The decision about ...
- According to historical cost principle, the assets and liabilities should be reported (tick whichever apply)? a.At their market value b.At their cost of acquisition c.At their replacement value d.All of the aboveWhat is the amount realized in a transaction? The gain on the sale of an asset The proceeds less the basis The sum of any money received plus the fair market value of other property received The portion of the gain that is recognizedIn a sale and leaseback transaction, which of the following statements is most incorrect? A. The seller-lessee records a rent expense. B. The buyer-lessor recognizes an gain. C. The seller-lessee derecognizes an asset. D. The buyer lessor recognizes an income.
