Chad Jones Is the Sole Owner and Manager of Jones

question 53

Multiple Choice

Chad Jones is the sole owner and manager of Jones Glass Repair Shop.Jones purchased a truck for $30,000 to be used in the business.Which of the following fundamentals requires Jones to record the truck at the price paid to buy it?

• A)Separate-entity assumption
• B)Revenue principle
• C)Unit-of-measure assumption
• D)Historical cost principle

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Definitions:

Oral Contract

An agreement made through spoken words and not written, which can be legally binding.

Guaranty

A legal commitment by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults.

Enforceable

A legal term referring to a contract or agreement that can be upheld and compelled by law.