The Accounting Concept That Indicates Assets Should Be Reported at the Price

question 208

Multiple Choice

The accounting concept that indicates assets should be reported at the price received to sell an asset is the

• A) economic entity assumption.
• B) monetary unit assumption.
• C) fair value principle.
• D) historical cost principle.

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Definitions:

Incremental Analysis

The process of evaluating the financial consequences of choosing one option over another in decision-making.

Differential Analysis

The process of comparing the financial differences between alternative business actions in order to make informed decisions.

CVP Analysis

Cost-Volume-Profit Analysis, a financial tool used to estimate how changes in costs, sales volume, and price affect a company's profit.

Incremental Analysis

The process of comparing the additional costs and benefits of a decision to determine if it is worthwhile.