The Revaluation Model of Accounting for Property, Plant, &Equipment Assets

question 76

Multiple Choice

The revaluation model of accounting for Property, Plant, &Equipment assets:

• A)may be applied to all classes of PP&E including investment property.
• B)uses a revaluation surplus account to hold net increases in the asset's fair value.
• C)should not be applied to investment property.
• D)should only be applied to investment property.

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Definitions:

Quick Ratio

A measure of a company's short-term liquidity, calculated as (Current Assets - Inventory) / Current Liabilities, indicating how well a company can meet its short-term financial liabilities.

Days' Sales in Inventory

A financial metric that estimates how long it takes for a company to turn its inventory into sales.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor costs.

Inventory

The entire stock of materials and products that a company possesses for the aim of production or selling.