The Cost of a Nonmonetary Asset Acquired in Exchange for Another

question 62

Multiple Choice

The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset and the exchange has commercial substance is usually recorded at

• A)the fair value of the asset given up, and a gain or loss is recognized.
• B)the fair value of the asset given up, and a gain but not a loss may be recognized.
• C)the fair value of the asset received if it is equally reliable as the fair value of the asset given up.
• D)either the fair value of the asset given up or the asset received, whichever one results in the largest gain (smallest loss) to the company.

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Definitions:

Tires Purchased

The acquisition of tires, highlighting consumer or business buying behavior in the automotive market segment.

Calculating

The process of using mathematical techniques and operations to determine quantities, values, or results, often involving numbers and equations.

Aggregate Expenditure

The total amount spent on an economy’s goods and services, by households, businesses, the government, and foreign buyers.

Imports

Goods and services that are brought into a country from abroad for sale.