Which of the Following Statements Is Not Correct

question 30

Multiple Choice

Which of the following statements is not correct?

• A) Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset.
• B) The book value of a long-term asset is reduced each year as depreciation is recorded.
• C) Buildings and trucks are examples of long-term assets.
• D) Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset.

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Definitions:

Sales Discount

A reduction in price given by a seller to a buyer, often to encourage prompt payment.

Sales Tax Payable

A liability account used to keep track of sales tax that has been collected from customers but not yet remitted to the government.

Discount Period

The timeframe during which a discount is offered for the early payment of an invoice or a bill, encouraging quicker payment.

Sales Invoice

A document issued by a seller to a buyer that lists products or services sold, including quantities and prices.