The Existence of Subjectivity in an Asset Valuation Does Not

question 40

Multiple Choice

The existence of subjectivity in an asset valuation does not necessarily mean the valuation will not be reliable.All of the following are examples of this except:

• A) where historical cost is used for accounts receivable, fixed assets, and other assets with values that remain relatively stable.
• B) where market value is used for marketable equity securities, commodities, and financial assets are traded in liquid markets
• C) where historical cost is used for LIFO inventory layers where inventory has seen an inflationary increase in costs.
• D) where historical cost is used for internally generated intangible asset valuations.

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Definitions:

Technical Personnel

denotes individuals who possess specialized skills, knowledge, and expertise in technological areas.

Sales Commission

A form of compensation awarded to sales employees based on the sales they generate.

Independent Salespeople

Individuals who sell a company's products or services without being employed by the company, often working on a commission basis.

Insurance Company

A business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment, or hardship in exchange for premium payments.