The Measurement Principle That Says Assets Are Reported at the Price

question 78

Multiple Choice

The measurement principle that says assets are reported at the price that would be received if the item were sold is called

• A) current value.
• B) historical cost.
• C) materiality.
• D) going concern.

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Definitions:

Supplies Expense

Supplies expense refers to the cost associated with items consumed or used up in the operation of a business, which are not directly part of the manufactured product.

Income Statement

A financial document that summarizes a company's revenues, expenses, and profits or losses over a specific period.

Prepaid Expense

Expenses paid in advance for goods or services to be received in the future, recorded as an asset on the balance sheet until they are incurred.

Prepaid Insurance

The portion of insurance premiums that have been paid in advance and is recorded as an asset until utilized.