Tastee Bakery donated its used delivery truck to the local Health Right Clinic,which provides free healthcare for people with no medical insurance.The bakery will record the donation as an operating expense.Since Tastee Bakery uses double-declining-balance depreciation,the book value of the truck is only $1,500,but the "blue book" market value of the truck is $2,500.If Tastee Bakery records a charity expense of $2,500,this accounting choice would be considered ________.

Question

Quizplus · Accepted Answer

The bakery is recording the donation at the higher market value, which is a conservative accounting choice.

Tastee Bakery Donated Its Used Delivery Truck to the Local