D&R Products Forecasts That It Will Require $10,000 for Equipment

question 17

Multiple Choice

D&R Products forecasts that it will require $10,000 for equipment and depreciation will be over five years. The $10,000 will be reflected in the balance sheet as

• A) inventory.
• B) gross fixed assets.
• C) net fixed assets.
• D) accounts payable.

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Definitions:

Physical Substance

A characteristic of certain assets that possess material existence and can be seen, touched, or quantified.

Ownership

The legal right or state of having control and possession over something, such as property or a company.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in generating sales from its assets.

Net Sales

The revenue from goods or services sold after deducting returns, allowances for damaged or missing goods, and discounts.