81. Most assets should be valued at cost because fair values
a. are not useful for decision-making.
b. may not be representationally faithful.
c. are not relevant.
d. may be higher or lower than historical cost.
82. Harrod's Inc. purchased land for ?55,000 in 2004. At December 31, 2014, an appraisal determined the fair value of the land is ?65,000. If Harrod's follows the historical cost principle, in the 2014 financial statements, the land will be reported at
a. ?55,000 on the statement of financial position.
b. ?65,000 on the statement of financial position.
c. ?55,000 on the income statement.
d. ?65,000 on the income statement.
83. Hyundai Inc. purchased land for W118,000,000 in 2005. At December 31, 2014, an appraisal determined the fair value of the land is W136,000,0000. If Hyundai follows the cost principle, the land will be reported on the statement of financial position at
a. W100,000,000.
b. W118,000,000.
c. W136,000,000.
d. W154,000,000.
84. Bumi Corporation purchased an investment in the ordinary shares of another corporation for Rp250,000,000 in 2012. The shares are actively traded on the Indonesian Stock Exchange. The fair value of the investment at December 31, 2014 is Rp268,000,000. If the company follows the fair value principle, the investment will be reported in the 2014 financial statement at
a. Rp250,000,000 on the statement of financial position.
b. Rp268,000,000 on the statement of financial position.
c. Rp250,000,000 on the retained earnings statement.
d. Rp268,000,000 on the retained earnings statement.
85. Asian Company purchased land for W92,000,000 in 2000. At December 31, 2014, an appraisal determined the fair value of the land is W106,000,000. The company has an investment in the ordinary shares of another company for which it paid W49,000,000 in 2012.The shares are actively traded on the South Korea Stock Exchange. The fair value of the investment at December 31, 2014 is W63,000,000. The land and investment will be reported on the December 31, 2014 statement of financial position at
a. W92,000,000 and W49,000,000, respectively.
b. W92,000,000 and W63,000,000, respectively.
c. W106,000,000 and W49,000,000, respectively.
d. W106,000,000 and W63,000,000, respectively.
86. The proprietorship form of business organization
a. must have at least three owners in most states.
b. requires that the owner be personally liable for all debts of the business.
c. combines the records of the business with the personal records of the owner.
d. is characterized by a legal distinction between the business as an economic unit and the owner.
87. The economic entity assumption requires that the activities
a. of different entities can be combined if all the entities are corporations.
b. must be reported to the Securities and Exchange Commission.
c. of a sole proprietorship cannot be distinguished from the personal economic events of its owners.
d. of an entity be kept separate from the activities of its owner.
88. A business organized as a corporation
a. is not a separate legal entity in most countries.
b. requires that shareholders be personally liable for the debts of the business.
c. is owned by its shareholders.
d. terminates when one of its original shareholders dies.
89. The partnership form of business organization
a. is a separate legal entity.
b. is a common form of organization for service-type businesses.
c. enjoys an unlimited life.
d. has limited liability.
90. Which of the following is
not
an advantage of the corporate form of business organization?
a. Limited liability of shareholders
b. Transferability of ownership
c. Unlimited personal liability for shareholders
d. Unlimited life