Which of the Following Statements Regarding Tangible Long-Lived Assets Is

question 68

Multiple Choice

Which of the following statements regarding tangible long-lived assets is not correct?

• A)Depreciation and maintenance are expenses associated with the use of tangible long-lived assets.
• B)Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost.
• C)The cost of a long-lived asset minus the accumulated depreciation is called the carrying value of the asset.
• D)All long-lived assets are depreciated as they are used in the business.

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Definitions:

Conversion Cost

The combined costs of direct labor and manufacturing overheads that are incurred in the process of converting raw materials into finished goods.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs like rent, utilities, and maintenance of equipment.

Selling and Administrative Expenses

These are indirect costs that are not directly tied to the production of goods or services, including sales personnel salaries, advertising, and office rent.

Period Costs

Costs that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative expenses.