In a Nonmonetary Exchange of Equipment, If the Exchange Has

question 23

Multiple Choice

In a nonmonetary exchange of equipment, if the exchange has commercial substance, a gain is recognized if:

• A)The fair value of the equipment received exceeds the book value of the equipment received.
• B)The book value of the equipment received exceeds the fair value of the equipment surrendered.
• C)The fair value of the equipment surrendered exceeds the book value of the equipment surrendered.
• D)None of these is correct.

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Definitions:

Diagram (A)

A graphical representation used to illustrate or clarify information, processes, or systems.

Price

The amount of money expected, required, or given in exchange for something else.

Quantity

The amount or number of a material or immaterial good considered as a unit or in total.

Long-Run Cost Diagram

A graphical representation that shows how the costs incurred by a firm change over time with varying levels of output when all inputs are variable.