From the Following,select the Most Appropriate Basis for the Valuation

question 58

Multiple Choice

From the following,select the most appropriate basis for the valuation of a new investment when properties or services are exchanged for stock.

• A) The par or stated value of the stock received
• B) The book value of the property or services exchanged
• C) The fair market value of the stock received
• D) Either the book value of the property or services exchange or the fair market value of the stock received,whichever is more clearly determinable

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Definitions:

Reversing Entry

An accounting entry that is made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous accounting period.

Notes Receivable

Written promises for amounts to be received, typically including interest, recorded by the recipient.

Noncurrent Assets

Assets expected to provide economic benefits beyond the next year or operating cycle, excluding items for resale.

Beginning Capital Balance

The beginning capital balance is the amount of capital or equity that a company has at the start of a new accounting period.