Question

Ten years after a company purchases a plot of land, it is reported on the balance sheet at its cost from the year it was purchased instead of its current selling price. This accounting practice is justified by the financial period assumption. going concern assumption fiscal period assumption. original cost base. Question 8 2 pts Today's fair market value would be the same as: the cash price of the asset when it was originally purchased. the current price paid for an item in the input market. the value of an item in the output market or sales price. the discounted future cash flows from input and output markets.

Answer 1

Answer 7:

Correct answer is:

original cost base.

Explanation:

Fixed assets are recorded on historical cost basis.

Hence option D is correct.

Financial period assumption relates to period for performance analysis. Going concern relates to assumption that entity will remain in business for the foreseeable future. Fiscal year is 12 month period for which an entity reports.

Answer 8:

Correct answer is:

the value of an item in the output market or sale price.

Explanation:

Fair value is the sale value or value of an item in output market. Replacement cost is current price paid for an item in input market. Present value is based on discounted cash flows. Historical cost of price of item originally paid.

Hence:

Option C is correct and other options A, B and D are incorrect.