The Fair Value of a Plant Asset Is Equal To

question 165

Multiple Choice

The fair value of a plant asset is equal to:

• A)the amount the business could sell the asset for.
• B)the amount of cash paid plus the dollar value of noncash consideration given in exchange for the plant asset at acquisition.
• C)the amount of cash paid plus the loan taken out to finance the purchase of the plant asset.
• D)the amount a company can receive for the asset when sold in order to go out of business.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update certain accounts and report revenues and expenses in the appropriate period.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life.

Supplies Expense

An accounting term referring to the cost of supplies consumed or used by a business within a reporting period.

Worksheet

An accounting tool used for planning and preparing financial statements, typically including trial balance, adjusting entries, adjusted trial balance, and financial statements.