Impairment of a Long-Term Operating Asset Occurs When ________

question 32

Multiple Choice

Impairment of a long-term operating asset occurs when ________.

• A) the carrying value of the asset is systematically reduced over its useful economic life
• B) there is a failure to meet the legal obligations or conditions of a loan by which that asset was acquired
• C) an asset or part of an asset is removed from the asset portfolio
• D) an asset's total future cash-generating ability falls below its carrying value

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Definitions:

Net Income

The amount of profit a company generates after all expenses, taxes, and costs have been subtracted from its total revenue.

Cash Dividends

Dividends paid out in the form of cash from a corporation's earnings to its shareholders.

Dividends Paid

Payments made by a corporation to its shareholders, usually derived from the company's profits.

Assets

Economic resources or owned items of value, such as cash, property, equipment, that an individual, company, or country owns or controls with the expectation that it will provide future benefit.