It May Be a Good Decision to Replace an Asset

question 258

True/False

It may be a good decision to replace an asset before its original cost has been fully recovered through increased revenues or decreased costs.

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Definitions:

Proprietorship

A type of business entity owned and run by one individual where there is no legal distinction between the owner and the business.

Accounting Records

Documentation and books that keep track of the financial transactions, operations, and condition of a business.

Revenues Recognized

Refers to the income that a company has earned and reported on its financial statements for a specific period, in accordance with accounting principles.

FASB Conceptual Framework

The Financial Accounting Standards Board (FASB) Conceptual Framework is a coherent system of interrelated objectives and fundamentals that is intended to lead to consistent standards.