Which of the Following Statements Is True

question 66

Multiple Choice

Which of the following statements is true?

• A) Accumulated depreciation is that portion of property, plant, and equipment's cost that has already been recorded as an expense.
• B) Accumulated depreciation represents a growing amount of cash to be used to replace the existing asset.
• C) Depreciation is a process of objective valuation.
• D) Depreciation means that a business sets aside cash to replace assets as they become fully amortized.

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Definitions:

Facility-level

Pertains to costs and activities that support the entire organization or operation as a whole, not tied to a specific product or department.

Assembling

The process of combining components or elements to form a complete item or system.

Unit-level Activity

Activities that are performed each time a unit is produced, directly associated with the production of units.

Manufacturing Overhead Costs

Expenses related to the production process that are not directly tied to the product, such as rent, utilities, and salaries of managers.