In Conformity with the Historical Cost Principle, Property Donated to a Corporation

question 157

True/False

In conformity with the historical cost principle, property donated to a corporation should be recorded by the recipient at the cost to the donor.

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Definitions:

Fixed Compensatory

Relates to a form of compensation or damages that are predetermined and not subject to change.

Memorandum Entry

This refers to a journal entry made in the financial records to note a significant event or transaction that doesn’t involve a direct exchange of cash or value and hence does not affect the financial statements directly.

Stock Option Plan

A compensation strategy that allows employees to purchase company stock at a predetermined price.

Liability Account

An account used in accounting to keep track of obligations or debts that a company owes to others, representing claims against the company's assets by external parties.