Answered: Assets purchased on long-term credit…

Business

Accounting

Assets purchased on long-term credit contracts should be recorded at the present value of the consideration exchanged.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Indicate whether each of the following statements is true or false.

1. Assets purchased on long-term credit contracts should be recorded at the present value of the consideration exchanged.

2. Companies account for the exchange of non-monetary assets on the basis of the book value of the asset given up or the fair value of the asset received.

3. Under IFRS, all gains on non-monetary exchanges are recognized, regardless of whether the transaction has commercial substance or not.

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