The correct option. Accounting Principle: Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company. Cost Principle: As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Question

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Answer 1

Question

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Required information Skip to question [The following information applies to the questions displayed below.]Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm while Jessie runs a craft business from their home. Jessie’s craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie’s college expenses (balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married-joint. Assume that the employer portion of the self-employment tax on Jessie’s income is $831. Joe and Jessie have summarized the income and expenses they expect to report…

I need assistance with this financial accounting problem using appropriate calculation techniques.

I need help with this general accounting question using standard accounting techniques.

Answer 2

Question

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 3

Question

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 4

Question

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

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Answer 5

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

Answer 6

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.

Conclusion

Thus, the correct option is c.

Answer 7

Chapter 1, Problem 1MCQ

To determine

To identify:

The correct option.

Accounting Principle:

Accounting principle are the special guidelines that should be followed by the company for recording the financial transactions of the company.

Cost Principle:

As per cost principle, a new asset purchased by a company it should be recorded at its actual cost instead of its current market value.

Answer 8

Expert Solution & Answer

Answer to Problem 1MCQ

Option c-$450,000' is correct.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Option c:

As per GAAP guidelines the new asset purchased by a company will always recorded at its actual cost based on cost principle of GAAP.
In the given case, a building is offered for sale at $500,000 but the current value of building is $ 400,000, the purchaser of building think the worth of building is of $475,000, but actually pay to supplier $450,000 so the correct option is c, $450,000
So, the current market value does not matter for accounting purpose of a fixed asset.

Option a:

As buyer does not pay $50,000 for machinery, so it is incorrect option.

Option b.

Current value of machinery plays no role in accounting. Only actual value will be recorded in books of accounts, so option b $400,000 is incorrect.

Option d:

Accounting is not done as per the thinking of the buyer so, option d $475,000 is incorrect option.

Option e:

Accounting is not done as per the thinking of the seller, so option e $500,000 is incorrect option.