When Accounting for Asset Exchanges

question 42

Multiple Choice

When accounting for asset exchanges,

• A) if a transaction lacks commercial substance, it is not recorded.
• B) an asset cannot be recognized at more than its fair value.
• C) if the fair values of either the asset given up or the asset received cannot be ascertained, then the Board of Directors may assign an arbitrary value.
• D) when an exchange lacks commercial substance, either a gain or loss may be recognized.

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Definitions:

Celiac Trunk

A major artery in the abdomen that supplies blood to the liver, stomach, spleen, and other organs.

Hepatic Artery

Branch of the aorta that delivers blood to the liver.

Saphenous Vein

A large vein running along the length of the leg, commonly used in grafts during coronary artery bypass surgery.

Femoral Vein

A major blood vessel in the thigh that carries deoxygenated blood from the lower body back to the heart.