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

question 113

Multiple Choice

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

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

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Definitions:

Job-Order Costing System

An accounting system that accumulates costs by individual jobs or orders, used in manufacturing and service environments where each job is distinct.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the period begins based on an estimate of total overhead costs and an allocation base.

Manufacturing Departments

Specific sections within a manufacturing facility where distinct stages of the production process are carried out, such as assembly or painting.

Machine-Hours

A measure of production output or work measurement based on the number of hours machines are operated.