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Book value of machinery on 31st March, 2011 10,00,000
Market value as on 31st March, 2011 11,00,000
As on 31st March, 2011, if the company values the machinery
At Rs. 11,00,000 which of the following valuation principle is being followed?
Market value as on 31st March, 2011 11,00,000
As on 31st March, 2011, if the company values the machinery
At Rs. 11,00,000 which of the following valuation principle is being followed?
- a)Historical Cost.
- b)Present value.
- c)Reaslisable Value.
- d)Current Cost.
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Book value of machinery on 31stMarch, 2011 10,00,000Market value as ...
Explanation:
Current Cost Valuation Principle:
The current cost valuation principle refers to the valuation of assets and liabilities at their current market value. Under this principle, the assets are valued at the price that they would fetch if they were to be sold in the market at the time of valuation.
Explanation of the Given Question:
In the given question, the book value of machinery as on 31st March 2011 is Rs.10,00,000 and the market value of the machinery as on the same date is Rs.11,00,000. If the company values the machinery at Rs.11,00,000 as on 31st March 2011, then it is following the current cost valuation principle.
Reasoning:
The market value of an asset represents the current cost of the asset. The company has valued the machinery at its current market value of Rs.11,00,000, which means that it is following the current cost valuation principle. The historical cost principle refers to the valuation of assets at their original cost, i.e., the cost at which they were acquired. The present value principle refers to the valuation of assets and liabilities at their present value, which is calculated by discounting the future cash flows. The realizable value principle refers to the valuation of assets at the amount that they are expected to realize from their sale or use.
Hence, the correct answer is option 'D' - Current Cost.
Current Cost Valuation Principle:
The current cost valuation principle refers to the valuation of assets and liabilities at their current market value. Under this principle, the assets are valued at the price that they would fetch if they were to be sold in the market at the time of valuation.
Explanation of the Given Question:
In the given question, the book value of machinery as on 31st March 2011 is Rs.10,00,000 and the market value of the machinery as on the same date is Rs.11,00,000. If the company values the machinery at Rs.11,00,000 as on 31st March 2011, then it is following the current cost valuation principle.
Reasoning:
The market value of an asset represents the current cost of the asset. The company has valued the machinery at its current market value of Rs.11,00,000, which means that it is following the current cost valuation principle. The historical cost principle refers to the valuation of assets at their original cost, i.e., the cost at which they were acquired. The present value principle refers to the valuation of assets and liabilities at their present value, which is calculated by discounting the future cash flows. The realizable value principle refers to the valuation of assets at the amount that they are expected to realize from their sale or use.
Hence, the correct answer is option 'D' - Current Cost.
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Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer?
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Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer?.
Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Book value of machinery on 31stMarch, 2011 10,00,000Market value as on 31stMarch, 2011 11,00,000As on 31stMarch, 2011, if the company values the machineryAt Rs. 11,00,000 which of the following valuation principle is being followed?a)Historical Cost.b)Present value.c)Reaslisable Value.d)Current Cost.Correct answer is option 'D'. Can you explain this answer?.
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