Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company. Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value. To identify: The correct option. Answer: Option c-$450,000' is correct.

Question

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Answer 1

Question

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 2

Question

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 3

Question

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 4

Question

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 5

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

Answer 6

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

Answer 7

Chapter 1, Problem 1MCQ

To determine

Accounting Principle : Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

To identify: The correct option.

Answer:

Option c-$450,000' is correct.

Answer 8

Expert Solution & Answer

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Conclusion

Thus, the correct option is c.

Answer 12

Ch. 1 - Prob. 1MCQ Ch. 1 - Prob. 2MCQ Ch. 1 - If the assets of a company increase by $100,000...Ch. 1 - Brunswick borrows $50,000 cash from Third National...Ch. 1 - Geek Squad performs services for a customer and...Ch. 1 - Prob. 1DQ Ch. 1 - Prob. 2DQ Ch. 1 - Identify four kinds of external users and describe...Ch. 1 - Prob. 4DQ Ch. 1 - Prob. 5DQ

Explanation of Solution

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Chapter 1 Solutions