A Donated Plant Asset for Which the Fair Value Has

question 76

Multiple Choice

A donated plant asset for which the fair value has been determined,and for which incidental costs were incurred in acceptance of the asset,should be recorded at an amount equal to its

• A) incidental costs incurred.
• B) fair value and incidental costs incurred.
• C) book value on books of donor and incidental costs incurred.
• D) book value on books of donor.

Determine cash provided by or used in investing activities.

Understand the effects of indirect vs direct method on reporting operating activities in the statement of cash flows.

Calculate the cash basis of sales, cost of goods sold, and expenses from given accrual basis financial information.

Understand the process of adjusting net income to a cash basis under both indirect and direct methods.

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Definitions:

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance.

Marginal Cost

The amount of money spent to manufacture one additional unit of a product or service.

Adam Smith

Was an 18th-century Scottish economist and philosopher, known as the "father of modern economics" for his influential work on the nature and causes of the wealth of nations.

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output decreasing with increasing scale.