If Stock Is Issued for a Noncash Asset the Asset

question 171

Multiple Choice

If stock is issued for a noncash asset the asset should be recorded on the books of the corporation at

• A) fair value.
• B) cost.
• C) zero.
• D) a nominal amount.

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Definitions:

Equity

The residual interest in the assets of an entity after deducting its liabilities, representing ownership interest in a company.

AASB 121

Refers to the Australian Accounting Standards Board's standard on The Effects of Changes in Foreign Exchange Rates, providing guidance on how to report foreign currency transactions and report the effects of changes in exchange rates.

Monetary Item

Financial assets and liabilities that carry a fixed or determinable amount of money, such as cash, receivables, and payables.

Foreign Exchange Rates

The prices at which one currency can be exchanged for another, influencing international trade and finance.