If Market-Value Accounting (Also Known as CoCoA or Exit-Price Accounting)were

question 21

Multiple Choice

If market-value accounting (also known as CoCoA or exit-price accounting) were to be applied in a set of accounts,then typically the treatment for recording depreciation would be:

• A) Restate the residual value and the cost to exit price and recalculate the depreciation.
• B) Restate the cost but leave the residual value unchanged and recalculate the depreciation.
• C) No depreciation is recognised.
• D) Continue to charge the same depreciation and recognise any changes in value in the income statement.
• E) None of the given answers.

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Definitions:

Deposits In Transit

Deposits that were made by customers of a bank but did not reach, or were not processed by, the bank before the preparation of the bank statement.

Bank Collections

The process of banks acting as intermediaries to collect and process payments, such as checks or drafts, on behalf of clients.

Credit Memorandum

A document issued by a seller to acknowledge a reduction in the amount that a buyer owes, often due to a return or refund.

Cash Account

An account reflecting the amount of cash available, including all receipts and payments of cash.