An Asset Should Be Recorded at Cost in Conformity with the Historical

question 73

Multiple Choice

An asset should be recorded at cost in conformity with the historical cost principle except:

• A) in an exchange of similar assets when the book value of the asset given is equal to the market price of the asset received.
• B) in an exchange of dissimilar assets.
• C) when a capital asset is donated to a company.
• D) when a capital asset is acquired with a note that specifies an unrealistic interest rate.

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Definitions:

Agriculture

The science, art, and practice of cultivating the soil, growing crops, and raising livestock, forming the backbone of the agricultural industry.

Founding Father

A leader or early statesman who contributed to the establishment of a nation, especially in the context of the United States.

Slave

An individual forcibly bound to serve another person, being treated as property and denied personal freedom.

American Government

The political system by which the United States operates, featuring a constitutional republic and a federal system of governance with three distinct branches: executive, legislative, and judicial.