Additions and Improvements

question 115

Multiple Choice

Additions and improvements

• A) occur frequently during the ownership of a plant asset.
• B) normally involve immaterial expenditures.
• C) increase the book value of plant assets when incurred.
• D) typically only benefit the current accounting period.

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Definitions:

Unrealized Gain

A profit that exists on paper resulting from an investment that has increased in value but has not yet been sold for cash.

Other Comprehensive Income

Revenues, expenses, gains, and losses not included in net income, but affecting shareholders' equity, like foreign currency translation adjustments.

Exposure Draft

A document issued by accounting or regulatory bodies for public comment, outlining proposed changes to accounting standards.

Contractual Cash Flows

The cash flows that are specified within the terms of a contract, especially important in the context of financial instruments.