Question

 Which of the following is an example of a non-cash transaction that affects the cost of an asset?

A Purchase of an asset for cash Correct Answer Incorrect Answer
B Sale of an asset for cash Correct Answer Incorrect Answer
C Exchange of assets Correct Answer Incorrect Answer
D Disposal of an asset Correct Answer Incorrect Answer

Solution

Explanation: When a company acquires an asset through a non-cash transaction, such as an exchange of assets, the cost of the asset is recorded as the fair value of the consideration given or received.

Practice Next

Relevant for Exams:

×
×