If a Business Has Several Types of Long-Term Assets Such

question 99

Multiple Choice

If a business has several types of long-term assets such as equipment, buildings, and trucks,

• A) there should be only one accumulated depreciation account.
• B) there should be separate accumulated depreciation accounts for each type of asset.
• C) all the long-term asset accounts will be recorded in one general ledger account.
• D) there won't be a need for an accumulated depreciation account.

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Definitions:

Average Rate of Return

A financial ratio that shows the average annual return on an investment, expressed as a percentage of the initial investment cost.

Estimated Annual Net Income

The projection of net earnings over a given fiscal year, taking into account all expected revenue and expenses.

Cash Payback Period

The length of time it takes for an investment to generate enough cash flow to recoup the original investment.

Annual Net Cash Flows

The net amount of cash that is received or expended by a business during a year, after all cash inflows and outflows are accounted for.