When an Exchange Is Deemed to Have No Economic Substance,the

question 19

Multiple Choice

When an exchange is deemed to have no economic substance,the gain is not recognized and is subtracted from which of the following to determine the cost of the new asset.

• A)The book value of the asset given
• B)The book value of the asset received
• C)The cash given
• D)The fair value of the asset received

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Definitions:

Spending Habits

Patterns or tendencies in how an individual or group uses their financial resources.

Earning

The income obtained from work (wages), investments, business, or other sources, typically measured over a certain period of time.

Conclusion

Conclusion is the final part of something, or in logic, the statement that logically follows from the premises in an argument.

Introduces

To present or bring to notice something for the first time, or to make something known that was previously unknown.