Which of the Following Would Cause Total Assets to Decrease

question 188

Multiple Choice

Which of the following would cause total assets to decrease and total expense to increase?

• A) Recording the depreciation of equipment
• B) Recording the consumption of supplies
• C) Recording the expiration of prepaid rent
• D) All of the above would have that effect.

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Definitions:

Acquisition Cost

Acquisition Cost refers to the total cost incurred to obtain an asset, including the purchase price and all associated expenses such as delivery and installation.

Self-Constructed Asset

A self-constructed asset is an asset that is built and created by a company using its own workforce and resources rather than purchasing it pre-made from another source.

Construction Period

The phase in which buildings or infrastructure projects are physically built, involving planning, design, and construction activities.

Revenue Expenditures

These are the costs incurred in the day-to-day operations of a business, which are fully expensed in the period they are incurred.