Which of the Following Transactions Is Consistent with Recognizing Value

question 29

Multiple Choice

Which of the following transactions is consistent with recognizing value changes on the balance sheet and income statement when they are realized in a market transaction?

• A) Selling land at a cost greater than its original purchase price.
• B) Recording an increase in the fair value of investments at year end.
• C) Translating foreign operations accounted for in Yen back to U.S.dollars in order to prepare consolidated financial statements.
• D) Writing down the value of an asset due to obsolescent.

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Definitions:

Accounts Payable

Short-term liabilities representing amounts owed to suppliers or creditors for goods and services received but not yet paid for.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of the entries.

Journal Entry

A record in accounting that represents a transaction, documenting the debit and credits affected by it.

Debit

A bookkeeping record that elevates the value of an asset or expense account, or reduces the value of a liability or equity account.