Asked by Danela Maceda on Jul 06, 2024
Verified
When old equipment is traded in for a new equipment, the difference between the list price and the trade-in allowance is called boot.
Trade-In Allowance
The credit a buyer receives for turning in an older item (such as a car) when purchasing a new one, reducing the out-of-pocket cost of the new purchase.
List Price
The official selling price of a product or service before any discounts are applied.
Boot
Additional value or cash added to a transaction to even out an exchange or transfer of assets.
- Master the accounting practices related to the disposal, sale, exchange, and removal of fixed assets.
Verified Answer
CB
christopher bagwellJul 10, 2024
Final Answer :
True
Explanation :
This statement is true. The boot is the difference between the list price (the price of the new equipment) and the trade-in allowance (the value of the old equipment that is being used as a trade-in).
Learning Objectives
- Master the accounting practices related to the disposal, sale, exchange, and removal of fixed assets.