When two proprietors decide to combine their businesses, generally accepted accounting principles usually require that noncash assets be taken over at their

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Generally accepted accounting principles require that noncash assets be taken over at their fair market value as of the date of formation when two proprietors decide to combine their businesses. This ensures that the combined company's financial statements reflect the most accurate and up-to-date values for its assets. Using historical cost value or book value may not reflect the true market value of the assets, while residual value is not a commonly used accounting term for valuing assets.

When Two Proprietors Decide to Combine Their Businesses, Generally Accepted