The Maximum Experience Company Acquired a Building for $500,000

question 25

Multiple Choice

The Maximum Experience Company acquired a building for $500,000.Maximum Experience had an appraisal done and found that the building was worth $575,000.The seller had paid $300,000 for the building six years ago.Which accounting principle would prescribe that Maximum Experience record the building on its records at $500,000?

• A)Monetary unit principle
• B)Going-concern principle
• C)Cost principle
• D)Business entity principle
• E)Revenue recognition principle

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Definitions:

Elton Mayo

An Australian psychologist and organizational theorist best known for his research in the Hawthorne Studies, which examined the effects of social relations, motivation, and employee productivity.

Total Quality Management (TQM)

A management organizational philosophy that was very influential in the 1980s and 1990s, which stated that quality must be present in the product or the service produced, and in the process itself of producing the goods or service.

Final Product

The completed output or outcome of a process that is ready for use or consumption.

Anti-American Sentiment

Encompasses negative attitudes or feelings towards the United States of America, its policies, culture, or citizens.