A New Corporation May Generally Select One of the Following

question 53

Multiple Choice

A new corporation may generally select one of the following accounting methods with the exception of

• A)cash method.
• B)accrual method.
• C)retail method.
• D)hybrid method.

---

Definitions:

Long-Lived Assets

Assets that provide economic benefits to a business over a prolonged period, typically more than one year, such as buildings, machinery, and equipment.

Fixed Assets

Enduring assets with physical presence utilized in business activities, not foreseen to be liquidated or changed to cash within twelve months.

Depreciable Cost

The difference between a fixed asset’s initial cost and its residual value.

Acquisition Cost

The total cost associated with acquiring an asset, including the purchase price and any additional expenses necessary to get the asset ready for use.