Your uncle is planning to sell his second home in Bethany Beach, Delaware in the next few weeks., You are interested in buying this beachside property, so your agent negotiates a price for the house with your uncle's agent. This transaction is an example of:

Question

Quizplus · Accepted Answer

The fact that the transaction is being negotiated through agents on both sides indicates that an arm's-length transaction is being assumed, where both parties are acting in their own best interest. The other options do not apply to this situation as the cost principle and going concern assumption are accounting principles and the realization principle is related to revenue recognition.

Your Uncle Is Planning to Sell His Second Home in Bethany