When a Long-Term Operating Asset Is Impaired, the Firm Reduces

question 22

Multiple Choice

When a long-term operating asset is impaired, the firm reduces the asset's carrying value on the balance sheet and recognizes the decline in value ________.

• A) as a loss from continuing operations on the income statement
• B) as an extraordinary loss on the income statement
• C) as an unrealized loss in other comprehensive income
• D) as a realized loss in other comprehensive income

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Definitions:

Indifference Curves

Graphical representations in economics showing combinations of goods among which a consumer is indifferent, meaning they have no preference for one combination over another.

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off.

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming an additional unit of a good or service.

Pareto Optimal

A state of allocation of resources in which it is impossible to make any individual better off without making at least one individual worse off.