James Cook Ltd Bought a Piece of Land 10 Years

question 54

Multiple Choice

James Cook Ltd bought a piece of land 10 years ago and the market value of this property is now worth five times its purchase cost.The accountant suggested that James Cook Ltd should revalue the asset.This notion is consistent with the qualitative characteristic of:

• A) relevance.
• B) faithful representation.
• C) understandability.
• D) comparability.

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Definitions:

Monopoly Profits

Excess profits earned by a monopoly as a result of having sole control over a market, enabling it to charge higher prices by restricting supply.

Product Differentiation

The process businesses use to make a product or service stand out from its competitors through distinctions in quality, design, or features.

Physical Differences

Variations in the bodily characteristics of individuals or entities, often used in the context of workforce skills or product characteristics.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for slight differentiation and some price control.