When Plant Assets Are Exchanged

question 85

Multiple Choice

When plant assets are exchanged:

• A) the old asset does not need to be removed from the books.
• B) the new asset will be debited for the list price of the asset.
• C) the gain or loss on the exchange is equal to the difference between the fair value and the book value of the old asset.
• D) total assets increase.

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Definitions:

Elastic Portion

A range in the demand or supply curve where a small change in price leads to a large change in the quantity demanded or supplied.

Total Revenue

Total Revenue refers to the total amount of money generated by a business from the sale of its goods or services before any costs are deducted.

Price Elasticity

Measures the responsiveness of the quantity demanded of a good to a change in its price, indicating how changes in price affect consumer demand.

Demand Is Elastic

A condition where the quantity demanded of a good or service is significantly changed due to a change in its price. High elasticity indicates a sensitive reaction to price changes.