The principle that states that assets acquired by the business should be recorded at their exchange value is the
B. Cost principle of measurement.
Cost principle of measurement is signifying that business has to record cost which is actually paid for the transaction. Here the assets is purchased so whatever cost is incurred for buying that asset should be recorded at that price in the books of accounts.
Asset is reported or recorded at its cost value in the financial statement.
Why not option A, C and D because
A. Matching principle - It is states that expenses incurred by business should be recorded in the income statement in the period in which revenue generated. Expenses are used for generating revenue. Here, expenses to be matched with revenue.
Here, business is not matching the cost value with any revenue. Its only asset acquisition transaction.
C. Revenue-recognition principle - This principle states that revenue is recorded when it is earned or realized.
Asset acquired is not a revenue.
D. Subjectivity Principle - Objectivity principle states that financial statement should be prepared on the basis of evidence whereas basis of accounting is a knowledge and it may lead to subjectivity principle. As said though knowledge is based on true facts, conclusion or judgement might be not correct or up to the mark. That’s why accounting principle also need to be consider subjectivity principle.
It is clearly stating that asset is acquired so this principle is not applied.
Correct Answer is B. Cost principle of measurement
The principle that states that assets acquired by the business should be recorded at their exchange...
Question 3 Fill in the blank with the best choice below: The principle states that assets are initially recorded at the amounts paid or obligated to pay to acquire the assets revenue recognition matching expense cost liability - TH the all I eate thi hành án
Question 11 (1 point) Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? full disclosure principle revenue recognition principle cost principle O expense recognition (matching) principle Question 12 (1 point) Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? separate entity concept time period assumption O monetary measurement concept Ogoing concern assumption
20) If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is considered by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at: A) $95,000 B) $137,000. C) $138,500. D) $140,000 E) $150,000 21) The rule that (1) requires revenue to be recognized when...
The matching principle states that O A. a business's activities can be sliced into small time segments O B. companies should record revenue when it has been earned O c. financial statements can be prepared for specific periods OD. all expenses should be recorded when they are incurred during the period
Review the transactional information and identify the accounting assumption, principle, and or constraint to which it is related. Select an option below to match with each question: A) Time Period or Periodicity Assumption B) Economic Entity Assumption C) Fair Value D) Revenue and Expense Recognition Principle E) Revenue Recognition Principle F) Cost principle G) Full Disclosure Principle H) Separate or Economic entity Principle I) Expense Recognition Principle 1) The amount of goodwill recorded by a company that purchases another company...
The basic principle involved with expense recognition is: Multiple Choice The business will continue to operate indefinitely unless there is evidence to the contrary, All transactions are recorded at the exchange price Oo oo The business is separate from its owners. All costs that are used to generate revenue are recorded in the period the revenue is recognized
Options: Correctness: Correct or Incorrect Principle: a. Faithfull representation b. Faithful representation (Full disclosure) Materiality c. Faithful representation (Net asset principle) d. Historical Cost Measurement e. Historical cost measurement and Net asset principle, Full disclosure materiality and separate-entity f. Matching; Comparability g. Matching; Time-period assumption h. Revenue and Historical cost measurement i. Revenue and matching; Faithful representation and Freedom from bias j. Revenue recognition k. Separate-entity l. Time-period assumption The following list of statements poses conceptual issues: Required: 1 and...
What accounting principle state that owner financials should not be intermingled with company finances? O A) Going-concern principle OB) Entity principle OC) Matching principle OD) Cost principle
Saved Help Save & Exit Subm The basic principle involved with expense recognition is: Multiple Choice 20:57 The business is separate from its owners. O All transactions are recorded at the exchange price. O C ) The business will continue to operate indefinitely unless there is evidence to the contrary. O O C All costs that are used to generate revenue are recorded in the period the revenue is recognized
The revenue recognition principle requires O A. time to be divided into annual periods to measure revenue properly. O B. revenue to be recorded only after the cash is received. O C. revenue to be recorded only after the business has satisfied its performance obligation OD. expenses to be matched with revenue of the period. Click to select your answer