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luda_lava [24]
3 years ago
10

A business purchases a vehicle for $35,000. Since the vehicle was advertised for $40,000 the company decided to record the asset

at $40,000. This is a violation of which accounting principle?A. RelevanceB. Historical costC. MaterialityD. Recognition
Business
1 answer:
grin007 [14]3 years ago
7 0

Answer: This is a violation of "B. Historical cost" principle.

Explanation: This principle establishes that assets must be registered at the time of purchase at historical cost.

The historical cost of an asset initially arises from its purchase value. To this value are added all the expenses that were necessary to place it in a position to operate or generate income.

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Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $34,000 (
MrRissso [65]

Answer:

1. $51,000

2.$11,000 Gain

Explanation:

(1) Calculation to determine At what amount will Calaveras value the pickup trucks

Using this formula

Trucks value =Fair value + Cash paid

Let plug in the formula

Trucks value=$45,000+$6,000

Trucks value=$51,000

Therefore Calaveras value the pickup trucks at $51,000

(2) Calculation to determine How much gain or loss will the company recognize on the exchange

Using this formula

Gain or loss on exchange =Fair value - Book value

Let plug in the formula

Gain or loss on exchange=$45,000-$34,000

Gain or loss on exchange=$11,000 Gain

Therefore the company will $11,000 GAIN recognize on the exchange

6 0
3 years ago
To an economist, an increase in demand means the same thing as an increase in quantity demanded.
Morgarella [4.7K]
<span>This is false. An increase in demand is more major than an increase in quantity demanded. Quantity demand refers to the demand of a product at a particular price and is only a movement on the demand curve. An increase in demand would cause the demand curve to shift which is more major than a movement and it encompasses the entire relationship between price and demand.</span>
7 0
3 years ago
Every 6 months, Leo Perez takes an inventory of the consumer debts he has outstanding. His latest tally shows that he still owes
Svetradugi [14.3K]

Answer:

The answer is "87%".

Explanation:

Please find the attached file.

6 0
3 years ago
Indicate what components of GDP (if any) each of the following transactions would affect.
kvv77 [185]

Answer:

It will fall under Consumption if it is a commodity or non-capital good purchased.

It will fall under Investment if it is a capital good that was sold or purchased.

It will fall under Government Spending if the Government bought or paid for it.

It will fall under Net Exports if it involves the purchase of goods from another country or the sale of goods to another country.

You buy a new Toshiba computer  - CONSUMPTION AND NET EXPORTS.  

Toshiba is a Japanese Company.

Ford manufactures a Focus and sells it to Avis, the car rental company. INVESTMENT.

It becomes a capital good to Avis.

Dell sells a desktop computer from its inventory to the Johnson family . - CONSUMPTION and INVESTMENT.

The Desktop is considered a capital good as it can be an investment by the family to produce goods or services.

Aunt Jane buys a new house from a local builder.  INVESTMENT

Housing is a capital good.

The federal government sends your grandmother a Social Security check. - TRANSFER PAYMENT which means it is not to be included in GDP.

Texas hires public middle school teachers .  - GOVERNMENT SPENDING.

Texas will be spending to pay teacher's salaries.

You pay a domestic plumber for fixing a leak in your bathroom.  - CONSUMPTION.

Uncle Paul pays a domestic contractor for renovating his home - CONSUMPTION.

This is housing but it involves buying goods to change the appearance of the house not buying the house itself.

6 0
4 years ago
National accounting identities Let C stand for consumption spending, I for investment, G for government purchases, X for exports
madreJ [45]

Answer:

A. National income must equal domestic product.

True.

Explanation:

National Income is the total value of goods and services produced in a country during a financial period. It is total income from a country's economic activities.

Domestic product is monetary value of all economic activities of a country during a period.

National Income is sum of Investments, Savings, Government expenditures and net exports. National Income equals the domestic products of a country. The equation is as follows:

C + I + G + (X - IM) = DI + NT.

The statement given is true. Disposable income equals the saving plus consumption. The excess of disposable income which is not consumed is saved.  Sum of saving and consumption must equal Disposable income in an economy.

4 0
3 years ago
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