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:

Labor-Intensive

A process or industry that requires a large amount of labor to produce its goods or services, typically compared to the amount of capital required.

Labor-Abundant

Referring to countries or regions that have a high supply of labor relative to capital, often resulting in lower labor costs.

World Trade Organization

An international organization that regulates international trade and ensures the smooth and free flow of trade between countries.

Trade Policy

Government regulations and strategies that determine how a country conducts trade with other nations, including tariffs, trade agreements, and import/export controls.