1. According to GAAP, at what value should a company show its assets on the balance sheet?

(a) market value at all times

(b) cash equivalent of asset given up or the asset received, whichever is more clearly

evident

(c) best estimate of an internal auditor

(d) cash outlay only, even if part of the consideration given was something other than cash.

2. Which of the following statements is not consistent with generally accepted accounting

principles as they relate to asset valuation?

(a) assets are generally recorded in the accounting records at cost to the enterprise.

(b) accountants assume that assets such as supplies, buildings and equipment will be used

in the business operations rather sold.

(c) subtracting total liabilities from total assets results in the current market value or equity.

(d) accountants base asset valuation upon objective, verifiable evidence rather than on

personal opinion.

3. The valuation basis used in conventional financial statement is:

(a) replacement cost (c) original cost

(b) market value (d) a mixture of cost and value

4. Imputing interest for certain assets and liabilities is primarily based on the concept of:

(a) valuation (c) consistency

(b) conservatism (d) stable monetary unit

5. In an arm's-length transaction, Company A and Company B exchanged nonmonetary

assets with no monetary consideration involved. The exchange did not culminate an

earning process for both Company A and Company B, and the fair values of the

nonmonetary assets were both clearly evident. The accounting for the exchange should be

based on the:

(a) fair value of the asset surrendered (c) recorded amount of the asset surrendered

(b) fair value of the asset received (d) recorded amount of the asset received

6. Company A and Company B exchanged nonmonetary assets with no monetary

consideration involved and no impairment of value. The exchange did not culminate an

earning process for either Company A or Company B. The accounting for the exchange

should be based on the:

(a) recorded amount of the asset received (c) fair value of the asset received

(b) recorded amount of the asset relinquished (d) fair value of the asset relinquished

7. Revenue is recognized when:

(a) it is probable that future economic benefits will flow to the enterprise.

(b) the future economic benefits can be measured reliably.

(c) it is possible that reliably measurable future economic benefits will flow to the

enterprise.

(d) It its probable that reliably measurable future economic benefits will flow to the

enterprise