The Accountant of Broken Bay Plc Decided to Retain the Historical

question 55

Multiple Choice

The accountant of Broken Bay Plc decided to retain the historical cost of the entity's intangible assets because it was difficult to obtain fair value of these assets.This action is consistent with ____________.

• A)substance over form
• B)balancing of relevance and faithful representation
• C)accrual accounting
• D)cash accounting

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Definitions:

Factory Overhead

All expenses related to production that aren't direct materials or direct labor costs.

Per-Unit Cost

The cost associated with producing or acquiring a single unit of product.

Finished Goods Account

An inventory account that holds the value of products that are completed and ready for sale.

Controlling Account

A general ledger account that summarizes the total balances of several subsidiary accounts, facilitating the organization and tracking of financial information.