CHAPTER 6 Flashcards
Original Acquisition cost of asse
Historical Cost
Price that would be received to sell an asset
Fair value of asset
Price that would be paid to transfer liability
FV of Liability
Entry Price / value
Historical Cost
Exit Price/value
Fair value
value in use
fulfillment value
current cost
PV of cash flow an entity expects to derive from the use of asset
Value in use
PV of cash an entity expects to transfer in paying liability
Fulfillment value
Most common measurement basis used in preparing financial statements
Historical cost
Generally revenue is recognized:
a. At point of sale
b. when cause and effect are associated
c. at point of collection
d. at appropriate points throughout operating cycle
A. At the point of sale
______ is the process of converting noncash resources and rights into cash or claims to cash
a. Allocation
b. Collection
c. Recognition
d. Realization
D. Realization
The three theoretical basis for allocation of expense
Immediate recognition
Systematic and rational allocation
cause and effect association
