In an Exchange of Assets, the New Asset Is Recorded

question 216

Multiple Choice

In an exchange of assets, the new asset is recorded at

• A) the fair value of the asset given up.
• B) the fair value of the new asset.
• C) the carrying amount of the asset given up plus any cash paid (or less any cash received).
• D) the fair value of the asset given up plus any cash paid (or less any cash received).

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Definitions:

Disposable Income

Financial holdings households can direct towards spending and saving activities after tax deductions.

Consumption

The act of using up goods and services to satisfy human needs and wants, considered a principal component of GDP.

Durable Goods

Goods that are intended to last for a long period of time, such as cars, appliances, and furniture, typically requiring more significant investment than non-durable goods.

Nondurable Goods

Items that are consumed or are only useable for a short period before they need replacement due to wear or consumption.