Which Valuation Technique Considers Replacement Cost of an Asset When

question 20

Multiple Choice

Which valuation technique considers replacement cost of an asset when determining fair value?

• A) Income approach
• B) Cost approach
• C) Market approach
• D) Lower-of-cost-or-market approach

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Definitions:

Outstanding Checks

Checks that have been issued and recorded in the payer's financial statements but have not yet been cashed or cleared by the bank.

Bank Reconciliation

The method of aligning the figures in a company's financial records for a cash account with the relevant data on a bank statement.

Bank Service Charge

Fees charged by banks for various services provided to customers, such as account maintenance or transaction processing.

Deposits In Transit

Funds that have been deposited by a company but not yet recorded by the bank, resulting in a timing difference in the account balance.