When Assets Are Acquired, They Should Be Recorded in the Accounts

question 25

Multiple Choice

When assets are acquired, they should be recorded in the accounts in conformity with the:

• A) cost principle.
• B) full-disclosure principle.
• C) materiality constraint.
• D) separate entity assumption.
• E) matching principle.

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Definitions:

AICPA Survey

A survey conducted by the American Institute of Certified Public Accountants that gathers information on various topics related to accounting practices, trends, and professional issues.

Straight-Line

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Discontinued Item

A component of a company's operations that has been disposed of or is held for sale, and its earnings are separated out on the income statement.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes in the United States that allows faster write-offs of assets.