If a Company Owned a Valuable Brand Name That Was

question 38

Multiple Choice

If a company owned a valuable brand name that was not recorded at its fair value, which of the following statements would be true?

• A)The company's fair value would be higher than its book value.
• B)The company's fair value would be lower than its book value.
• C)Its assets would be equal to its fair value.
• D)It assets would be equal to its book value.

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Definitions:

Share Capital

The funds raised by a company through the issuance of shares, representing the ownership interest invested by shareholders.

Acquisition

The process by which a company purchases most or all of another firm's shares or assets to gain control or ownership of that company.

Investment Account

An account held at a financial institution that is used for the purpose of investing in securities such as stocks, bonds, mutual funds, and other investment vehicles.

Unrealised Profit

Profit that has been recorded on paper due to accounting entries but has not yet been realized through actual cash transactions.