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Valuation of Assets - SS1 Accounting Past Questions and Answers - page 1

1

Which of the following is a common method used to value assets?

A

Comparative Analysis

B

Subjective Analysis

C

Sensitivity Analysis

D

Random Analysis

correct option: a
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2

The income approach to valuing assets is commonly used for which type of property?

A

Commercial real estate

B

Residential real estate

C

Physical assets

D

Stocks

correct option: a
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3

The cost approach to valuing assets is commonly used for which type of asset?

A

Stocks

 

B

Physical assets

C

Rental properties

D

Bonds

correct option: b
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4

The market capitalization approach is commonly used to value which of the following?

A

Rental properties

 

B

Physical assets

C

Publicly traded companies

D

Private companies

correct option: c
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5

What is the purpose of valuing assets?

A

To determine their fair value or worth

B

To determine their purchase price

C

To determine their age

D

To determine their location

correct option: a
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6

What is the importance of asset valuation?

A

Helps in making informed investment decisions

B

Helps in determining the location of assets

 

C

Helps in determining the age of assets

D

Helps in determining the colour of assets

correct option: a
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7

What are the three main methods used to value assets?

The three main methods used to value assets are the comparable sales approach, income approach, and cost approach.

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8

Why is asset valuation important for financial reporting purposes?

Asset valuation is important for financial reporting purposes because assets are typically recorded on a company's balance sheet at their fair value.

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