The Purchase of Fixed Assets Is Likely to Require Different

question 70

Multiple Choice

The purchase of fixed assets is likely to require different authorization processes than the purchase of inventory.Which of the following is not likely to be part of the authorization of fixed assets?

• A)Specific authorization
• B)Inclusion in the capital budget
• C)An investment analysis or feasibility analysis of the purchase
• D)Approval of the depreciation schedule

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Definitions:

Supplies Expense

The cost associated with consumable supplies used during an accounting period in the operation of a business.

Supplies

Items used in the day-to-day operations of a business, such as office supplies, which are essential for conducting business activities.

Inventory

The cumulative inventory of products and materials retained by a business for selling or for use in manufacturing.

Unearned Rent Revenue

Represents income received by a property owner for which the services (rental period) have not yet been provided.