ABC Inc Is a Public Entity Which Applies the Fair Value

question 167

Multiple Choice

ABC Inc. is a public entity which applies the Fair Value Model to all of its Investment property. On January 1, Year 1, the company purchased Land held for resale for $120,000. This land was independently appraised at $100,000 on December 31^st, Year 1. The year-end adjusting journal entry would include:

• A) a loss of $20,000.
• B) a debit to Revaluation surplus - OCI- Land.
• C) a credit to depreciation expense of $20,000.
• D) a debit to contributed surplus of $20,000.

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Definitions:

Egocentric

Focused on oneself and considering one’s own perspectives and interests above those of others.

Essentialist Tendency

The inclination to believe in an intrinsic, unchanging nature of things, often ignoring the influence of culture, context, and history.

Generalize

To make a general or broad statement by inferring from specific cases.

Average

A statistical measure representing the central or typical value in a set of data, calculated by dividing the sum of all values by the number of values.