When a Plant Asset Is Acquired by Issuance of Ordinary

question 33

Multiple Choice

When a plant asset is acquired by issuance of ordinary shares, the cost of the plant asset is properly measured by the

• A) par value of the shares.
• B) stated value of the shares.
• C) book value of the shares.
• D) fair value of the shares.

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Definitions:

Variable Expenses

Expenses that change in proportion to the amount of goods produced or the volume of sales, including labor and materials.

Sales Territories

geographical or demographic areas assigned to sales representatives or teams to manage and cultivate customer relationships and sales activities.

Contribution Margin

The amount of revenue remaining after deducting variable costs, used to cover fixed costs and contribute to profit.

Variable Expenses

Expenditures that fluctuate in alignment with the quantity of production or sales figures, like labor costs and materials used.