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ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1st April, 2000. On 1st April, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :
- a)Historical Cost
- b)Realizable value
- c)Current Cost
- d)Present Cost
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2...
Explanation:
Current Cost refers to the amount of money that is required to replace an asset with the similar asset in the current market conditions. In the given question, ABC Ltd. purchased a building by paying Rs 50,00,000 on 1st April 2000. On 1st April 2007, it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as the current cost.
The other options are:
- Historical Cost: It is the cost of an asset when it was purchased or acquired by the company. In this case, the historical cost of the building is Rs. 50,00,000.
- Realizable Value: It is the amount of money that a company can receive by selling an asset in the market. In this case, the realizable value of the building is not given.
- Present Cost: It is the cost of an asset at the present time. In this case, the present cost of the building is Rs. 1,50,00,000.
Therefore, the correct answer is option C, i.e., Current Cost.
Current Cost refers to the amount of money that is required to replace an asset with the similar asset in the current market conditions. In the given question, ABC Ltd. purchased a building by paying Rs 50,00,000 on 1st April 2000. On 1st April 2007, it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as the current cost.
The other options are:
- Historical Cost: It is the cost of an asset when it was purchased or acquired by the company. In this case, the historical cost of the building is Rs. 50,00,000.
- Realizable Value: It is the amount of money that a company can receive by selling an asset in the market. In this case, the realizable value of the building is not given.
- Present Cost: It is the cost of an asset at the present time. In this case, the present cost of the building is Rs. 1,50,00,000.
Therefore, the correct answer is option C, i.e., Current Cost.
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ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer?
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ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer?.
ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ABC Ltd. purchased a building by paying Rs 50,00,000 as on 1stApril, 2000. On 1stApril, 2007 it found that it would cost Rs. 1,50,00,000 to purchase the similar building. This value of Rs. 1,50,00,000 is known as :a)Historical Costb)Realizable valuec)Current Costd)Present CostCorrect answer is option 'C'. Can you explain this answer?.
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