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Which of the following statements about the concepts underlying the balance sheet is correct? A company bought land for $5 million dollars 10 years ago.
Which of the following statements about the concepts underlying the balance sheet is correct?
A company bought land for $5 million dollars 10 years ago. The land is now worth $15 million. The company should increase the book value of this asset on its balance sheet to reflect its current value. | ||
All events affecting the current value of a company are reported on the balance sheet. | ||
According to the cost principle, assets are valued at their replacement cost. | ||
If an asset's value increases, the increase in value is generally not recorded under GAAP. |
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