Suppose you decide to purchase a stereo and an independent store dealer offers to sell you a system that retails for $4,000 for a price of $3,695. After some negotiation, you purchase the system for $3,400. The $3,400 is considered the accounting measurement for the transaction because of the

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The $3,400 price is considered the accounting measurement for the transaction because of the arm's-length transaction assumption, which assumes that the buyer and seller are acting independently and in their own best interest to arrive at a fair transaction price. This is supported by the fact that there was some negotiation involved in the final price. The other options (A, B, and C) are not relevant to determining the accounting measurement for this transaction.

Suppose You Decide to Purchase a Stereo and an Independent