When Historical Cost Is Used to Record Equipment, It Would

question 15

Multiple Choice

When historical cost is used to record equipment, it would appear as the

• A) original cost on the balance sheet.
• B) market value on the balance sheet.
• C) residual value on the balance sheet.
• D) original cost on the income statement.

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Definitions:

Quantity Supplied

The total amount of a particular good or service that producers are willing and able to sell at a given price over a specific time period.

Perfectly Inelastic

A situation in demand where the quantity demanded does not change in response to a change in price; represented graphically as a completely vertical demand curve.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various prices.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.