A Fixed Asset with a Cost of $41,000 and Accumulated

question 113

Multiple Choice

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is

• A) $3,000
• B) $4,500
• C) $500
• D) $1,500

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Definitions:

Mirror Image Rule

A principle in contract law that holds that an offer must be accepted exactly as it is presented, without modifications.

Statute Of Frauds

a legal principle that requires certain types of contracts to be in writing and signed by the party to be charged, in order to be enforceable.

UCC

Stands for Uniform Commercial Code, a set of comprehensive laws governing commercial transactions and dealings across the United States.

Reasonable Payment Terms

Fair and equitable conditions or periods within which payments are to be made under a contract or agreement.