121. The historical cost concept requires that most assets be recorded at the amount paid for them, regardless of increases in market value. 122. An asset source transaction increases a business's...

121. The historical cost concept requires that most assets be recorded at the amount paid for them, regardless of increases in market value.

122. An asset source transaction increases a business's assets and the claims to assets.


Answer: True
Learning Objective:01-04

Topic Area: Types of Transactions
AACSB: Reflective Thinking
AICPA: BB Resource Management
AICPA: FN Measurement
Blooms: Understand
Difficulty: Easy
Feedback: This is true. An asset source transaction increases a business’s assets and either liabilities or equity, which make up claims to assets.
123. Borrowing money from the bank is an example of an asset source transaction.

Answer: True
Learning Objective:01-04

Topic Area: Types of Transactions
AACSB: Reflective Thinking
AICPA: BB Resource Management
AICPA: FN Measurement
Blooms: Understand
Difficulty: Easy
Feedback: This is true. Borrowing money from the bank is an example of an asset source transaction because the asset cash increases as well as the liability notes payable.

124. An asset use transaction does not affect the total amount of claims to a company's assets.

125. The four financial statements prepared by a business bear no relationship to each other.

126. All of a business’s temporary accounts appear on the income statement.