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.

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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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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…

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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.