When a New Company Was Formed, One Partner Contributed Some

question 59

Multiple Choice

When a new company was formed, one partner contributed some used equipment he owned. The equipment was appraised at $44,000 and $50,000 by two different dealers. The accountant entered the equipment at $44,000 in the financial records of the partnership. This is an example of

• A) the materiality principle.
• B) the conservatism principle.
• C) the matching principle.
• D) industry practice principle.