On a Statement of Financial Affairs, a Company's Assets Should

question 75

Multiple Choice

On a statement of financial affairs, a company's assets should be valued at:

• A) Historical cost.
• B) Net realizable value, if lower than historical cost.
• C) Replacement cost.
• D) Net realizable value, if higher than historical cost.
• E) Net realizable value, whether higher or lower than historical cost.

---

Definitions:

Adjusting Entry

Financial records prepared at the close of an accounting timeframe to attribute profits and outlays to the specific period in which they happened.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting how much of the asset's value has been used up over time.

Fixed Asset

Long-term tangible property, plant, or equipment that a firm owns and uses in its operations to generate income.

Book Value

The cost of a fixed asset minus accumulated depreciation on the asset.