The Valuation Basis Used to Measure Equipment and Other Plant

question 12

Multiple Choice

The valuation basis used to measure equipment and other plant assets on the balance sheet is:

• A)the dollar amount for which the assets can be sold.
• B)the cash expected to be received in the future.
• C)the original cost adjusted for depreciation.
• D)the assets' net realizable value.

Recognize ethical dilemmas auditors may encounter and understand the role GAAP plays in such dilemmas.

Analyze the considerations and issues surrounding the adoption of IFRS by the SEC.

Identify and understand different types of pronouncements issued by the FASB and their purposes.

Describe the FASB initiatives aimed at converging U.S. accounting standards with international standards.

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Definitions:

Specially Manufactured Goods

Items that are produced to a buyer's personal specifications, which are not suitable for sale to others in the ordinary course of the seller's business.

Promissory Estoppel

A legal doctrine that prevents a party from withdrawing a promise made to another party if the latter has relied upon that promise to their detriment.

Oral Contracts

Agreements between parties that are spoken rather than written but are still legally binding.

Real Estate Mortgage

A legal agreement where real property is used as collateral for a loan.