Committed Costs Need to Be Treated in a Special Way

question 89

Multiple Choice

Committed costs need to be treated in a special way so that the system

• A) audits the amounts assigned.
• B) periodically assigns a portion of their total cost to actual cost.
• C) enters the amount of the cost one time at the end of the project.
• D) enters the amount of the cost one time at the beginning of the project.

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Definitions:

Future Cash Flows

Estimated amounts of money expected to be received or paid out by an entity in the future as a result of financial transactions or business operations.

Net Book Value

The value at which an asset is carried on a balance sheet, calculated as the asset's original cost minus accumulated depreciation and impairments.

Accelerated Depreciation

A method of depreciation where assets lose value at a faster rate in the initial years of their life.

Straight-Line Depreciation

A method of calculating the depreciation of an asset that allocates an equal amount of depreciation each year over the asset's useful life.