Valuing Assets at Their Liquidation Values Rather Than Their Cost

question 6

Multiple Choice

Valuing assets at their liquidation values rather than their cost is inconsistent with the

• A) periodicity assumption.
• B) historical cost principle.
• C) matching principle.
• D) economic entity assumption.

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Definitions:

Event Will Not Occur

The probability that a specific event does not happen, which can be calculated by subtracting the event’s probability of occurring from 1.

Conditional Probability

The likelihood of one event happening after another event has already taken place.

Independent Events

Events whose occurrence or outcome is not influenced by one another; the outcome of one event does not affect the outcome of another.

Mutually Exclusive Events

Two or more events that cannot occur at the same time within a given experimental setup.