Capital Assets Include Which of the Following

question 51

Multiple Choice

Capital assets include which of the following?
I.Depreciable equipment used in Robbie's business.
II.A new car held for resale by Andrews Auto Sales.
III.Accounts receivable held by Jessica because of sales on credit while operating her store.
IV.A set of golf clubs, belonging to a surgeon.
​

• A)Only statement I is correct.
• B)Only statement IV is correct.
• C)Statements III and IV is correct.
• D)Statements I, III, and IV are correct.
• E)Statements I, II, III, and IV are correct.

---

Definitions:

Tax Liability

The total amount of tax owed by an individual or corporation to a taxing authority.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle, but adjusts for changes in the value of money over time.

Current Cost

The expense required to replace an asset or an inventory item at the present time, as opposed to its historical purchase price.

FIFO Cost Flow

An inventory valuation method where the cost of the oldest inventory items are the first to be recorded as sold.