The Maxim Company Acquired a Building for $500,000

question 204

Multiple Choice

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?

• A) Monetary unit assumption.
• B) Going-concern assumption.
• C) Cost principle.
• D) Business entity assumption.
• E) Revenue recognition principle.

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