An Oklahoma City Business Paid $15,000 Cash for Equipment Used

question 107

Multiple Choice

An Oklahoma City business paid $15,000 cash for equipment used in the business. At the time of purchase, the equipment had a list price of $20,000. When the balance sheet was prepared, the value of the equipment was $22,000. What is the relevant measure of the value of the equipment?

• A)Historical cost, $15,000
• B)Fair market cost, $20,000
• C)Current market cost, $22,000
• D)$15,000 on the day of purchase, $22,000 on balance sheet date

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Definitions:

Agency Sponsorship

Support or endorsement from an organization, often financial or resource-based, for activities or projects.

Funding

The act of providing financial resources, typically by an organization or government, to support a project, program, or venture.

Temperate Phrasing

The use of moderate and balanced language to express ideas or opinions, avoiding extreme or provocative terms.

Provoke

To stimulate or incite someone to action or feeling, often with the intent of eliciting a specific reaction.