When an Asset Acquired Through Government Grants Is Recorded Using

question 45

Multiple Choice

When an asset acquired through government grants is recorded using the capital approach,

• A) assets and equity increase by the fair value of the asset.
• B) assets and liabilities increase by the fair value of the asset.
• C) assets and equity increase by the cost of the asset.
• D) assets and liabilities increase by the cost of the asset.

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Definitions:

Dividends Per Share

The amount of dividend that a company pays out to each shareholder, expressed on a per share basis.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote on corporate matters.

Par Value

The face value of a bond or stock as stated by the issuing company.

Cash Dividend

A disbursement by a company to its stockholders, typically coming from earnings.